What is balance brought forward in accounting
u2018undercastu2019 is a term referring to the transfer of an amount from one place to another, (whether in the same account as in balance brought forward, of between two accounts like ledger account to trading and p/l account, etc.
) at an reduced value.
,for example: if you sell a product at 2000 (cash sale), and make a wrong journal entry of,Cash A/cu2026 Dr 200,To Sales A/c 200,then it is not undercast, it is misstated.
,however if you had passed the correct entry,Cash A/cu2026 Dr 2000,To Sales A/c 2000,and then at a later stage, while ledger posting in the Sales A/c or the Cash A/c, posted it as 200, (or anything less than 2000) then that particular account would have been undercast by the difference in the amounts.
in our example (2000-200) 1800.
,hope thisll help.
Balance carried forward formula
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