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What Does "Carried down" Mean?

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum
Malcolm Tatum

"Carried down" is a term that is normally used in accounting circles to identify the balance associated with a specific account at the end of a period, which will in turn serve as the beginning or opening balance for that account at the beginning of the next period. Sometimes known as a carry over, this balance is in effect carried down to the next period in the sequence. Using this method makes it possible to reconcile the ending of one period with the beginning of another and also make it easier to identify any type of posting errors that may occur, and resolve them with relative ease.

The concept of carried down balances is not new; this process has been in use since the earliest development of standardized accounting methods. By arriving at a final balance on account at the end of each accounting period, it is possible to prepare statements and other types of reports that aid in assessing the activity that occurred during that particular time frame. At the same time, the carried down balance provides the starting point for activity that takes place in the new period, all without creating an interruption in the process of accurately tracking all types of transactions.

"Carried down" is a term that is normally used in accounting circles to identify the balance associated with a specific account at the end of a period.
"Carried down" is a term that is normally used in accounting circles to identify the balance associated with a specific account at the end of a period.

One of the most commonly employed forms of carried down bookkeeping is found with the monthly account statements that financial institutions prepare and forward to their clients. The statement is normally arranged in chronological order, with the beginning balance for the period determined by the closing balance of the previous period. Throughout the accounting period, various debits and credits are recorded, making it easy to track all transactions relevant to that account. On the final day of the period, the closing balance is determined, and that balance is carried down to the next period, serving as the opening balance.

Using a carried down strategy to show the logical progression from one accounting period to another is such a basic concept that many individuals and businesses follow this procedure without really giving the matter any thought. Along with making it easier to maintain a history of the sequence of transactions that affect the account, carried down bookkeeping also comes in handy when calculating taxes due on the transactions associated with a given account. The opening and closing balances for the period help to set the standard for managing various accounts effectively and tracking activity so that budgets can created or amended based on the historical data associated with the accounts and the changes in carried down amounts from one period to the next.

Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including WiseGEEK, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

Learn more...
Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including WiseGEEK, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

Learn more...

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    • "Carried down" is a term that is normally used in accounting circles to identify the balance associated with a specific account at the end of a period.
      By: Minerva Studio
      "Carried down" is a term that is normally used in accounting circles to identify the balance associated with a specific account at the end of a period.