Brought Down (b/d)

Definition

“Brought Down” (b/d) is an accounting term used in bookkeeping to denote the carrying forward of an opening balance from a previous accounting period to the current period’s ledger. The term typically appears in financial records to ensure continuity and accurate summing of accounts over multiple periods. The balance that is ‘brought down’ becomes the starting balance for the new financial period, and it is an essential element in maintaining seamless financial reporting.

Examples

1. Example 1

   • Previous Period Balance: At the end of March, a ledger account shows a balance of $5,000 on the debit side.
   • Brought Down (b/d): On April 1st, this balance is carried forward and recorded as “$5,000 b/d” on the debit side of the ledger for April, signifying the opening balance of the new period.

2. Example 2

   • Previous Period Balance: A company’s account for office supplies at the end of December shows a balance of $2,000.
   • Brought Down (b/d): On January 1st, the same amount is entered as “$2,000 b/d” on the debit side for the beginning of the new year, thus ensuring continuity.

Frequently Asked Questions (FAQs)

Q1: Why is the ‘brought down’ notation important in accounting?

• It ensures that the opening balances are correctly carried forward into the new period, which is crucial for the accuracy and consistency of financial records.

Q2: Where does the ‘brought down’ balance appear?

• It appears on the first line of the ledger account for the new period, signifying the period’s opening balance.

Q3: Is ‘brought down’ only applicable for debit balances?

• No, ‘brought down’ can refer to both debit and credit balances, depending on the account type.

Q4: Can the ‘brought down’ balance be different from the closing balance of the previous period?

• Typically, the ‘brought down’ balance should be the same as the closing balance of the previous period, ensuring accurate accounting. However, adjustments, corrections, or reconciliations can sometimes result in differences.

Q5: What is the difference between ‘brought down’ and ‘carried down’ in accounting?

• ‘Brought down’ (b/d) is used for opening balances in a new period, whereas ‘carried down’ (c/d) denotes closing balances at the end of the current period.

Related Terms

• Carried Down (c/d): Refers to the closing balance at the end of an accounting period that will be brought down to the next period as the opening balance.

• Ledger: A book or other collection of financial accounts of a particular type.

• Trial Balance: A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account columns to ensure that a company’s bookkeeping system is mathematically correct.

Online Resources

• Investopedia - Basic Accounting Principles: Investopedia
• Accounting Coach - Understanding Accounting Basics: Accounting Coach
• Coursera - Financial Accounting Fundamentals: Coursera
• Khan Academy - Introduction to Financial Accounting: Khan Academy

Suggested Books for Further Studies

1. “Accounting Made Simple: Accounting Explained in 100 Pages or Less” by Mike Piper
2. “Principles of Accounting” by Belverd E. Needles Jr., Marian Powers, and Susan V. Crosson
3. “Financial Accounting for Dummies” by Maire Loughran
4. “Intermediate Accounting” by Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield

Accounting Basics: “Brought Down (b/d)” Fundamentals Quiz

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