What is an Account Balance?

An account balance is the amount either credited to or owed on a ledger assigned to a particular entity or line-item.

The balance of an account is the net debit or credit assigned to it after all transactions have been documented for a current period. Transactions might be deposits, withdrawals, interest credited, fees, or other activity.

The account in question could be a personal savings or checking account, or a ledger account at a business or institution, or another form of account, such as the macroeconomic concept of current national account. Accounts are said to be “in the red” when there is a net debit (negative) amount, and “in the black” when there is a net positive balance (net credit).

Classic rock factoid: Neil Young made a reference to this with the line “out of the blue, and into the black” in his song Hey Hey, My, My; in admonition of the materialism of pop rock culture.

What is a Balance Sheet?
What is Profit and Loss (P&L) Statement?