Definition
Carried Down (c/d) in the realm of bookkeeping, refers to the process where an amount from one accounting period is transferred to be the opening balance for the next period. This is typically seen at the end of a financial year when preparing final accounts, ensuring that balances are accurately rolled over to begin the new fiscal period without disruption.
Importance and Usage
This method ensures continuity in accounting records, offering a seamless transition from one period to the next. Without carrying down balances, the financial statements would start from zero each year, turning financial analysis into an accountant’s version of ‘Groundhog Day’—repetitive and devoid of context from the past.
Practical Perspective
In a typical ledger, “carried down” balances will be at the bottom of an account and literally ‘carried down’ (dropped lower) to the top of the next page or the new ledger. If accountants had their way, drones would likely be on payroll just to physically carry these balances from one page to another in dramatic fashion. Alas, we use arrows and carry down terms instead.
Example:
Suppose a business concludes its year with a cash book balance of $5,000. This balance would be ‘carried down’ to the top of the cash book as the opening balance for the new accounting year, ensuring that all transactions continue from the correct starting point.
Related Terms
- Brought Down (b/d): The counterpart to ‘carried down’. It indicates the opening balance, a figure from a previous period that is brought into a new period.
- Balance B/F (balance brought forward): Similar to the above terms, highlighting a figure that is continued into a new accounting page or period.
- Balance C/F (balance carried forward): Another similar term, emphasizing a closing balance that is transported to the next period.
Recommended Books
To get a firmer grip (and perhaps a few chuckles) on accounting, consider diving into these resources:
- “Accounting Made Simple” by Mike Piper - Learn the basics without needing a pot of coffee to stay awake.
- “The Joy of Accounting” by Peter L. Venison - A whimsical take on numbers that might just spark a love for debits and credits.
Venture into the world of accounting with these insights, ensure your financial narratives continue smoothly from year to year, and maybe surprise yourself by actually enjoying the process!
