Eli5 What does it mean to ‘balance the books’?
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This is one of those things where once you get it you are going to be like “oh duh…”. Ok so lets say you own a business, you are going to have a lot of money coming in from providing services/goods (revenue) as well as money going out paying workers, operating costs, and raw materials (expenses). So when you look at the cash flow to the business you are going to have a bunch of money coming in and money going out, but what is important is to know how much money you actually have. So when you “balance the books” you take all of the money coming in, you add it to what you already had, and then you subtract how much you have paid out. This gives you how much money you currently have.
I know this one, it’s about accounting. Heres a run down
Back before computers and the time of technology when we lived in the black and white era, we used books called ledgers (idky it’s not balance the ledgers) but they would have a ledger for each person they owned money to or something similar to that, and they would have a giant book showing all the money they made owe waiting for etc. Balancing the books was to make sure that everything is all good and the numbers are together, because if my big book says you everyone owes me a combined 1500 and my small book says you owe me 700, I need to find out why the numbers are off
If this is incorrect and someone knows more than me, feel free to correct me, this is just what I understand about this topic
I know this one, it’s about accounting. Heres a run down
Back before computers and the time of technology when we lived in the black and white era, we used books called ledgers (idky it’s not balance the ledgers) but they would have a ledger for each person they owned money to or something similar to that, and they would have a giant book showing all the money they made owe waiting for etc. Balancing the books was to make sure that everything is all good and the numbers are together, because if my big book says you everyone owes me a combined 1500 and my small book says you owe me 700, I need to find out why the numbers are off
If this is incorrect and someone knows more than me, feel free to correct me, this is just what I understand about this topic
I know this one, it’s about accounting. Heres a run down
Back before computers and the time of technology when we lived in the black and white era, we used books called ledgers (idky it’s not balance the ledgers) but they would have a ledger for each person they owned money to or something similar to that, and they would have a giant book showing all the money they made owe waiting for etc. Balancing the books was to make sure that everything is all good and the numbers are together, because if my big book says you everyone owes me a combined 1500 and my small book says you owe me 700, I need to find out why the numbers are off
If this is incorrect and someone knows more than me, feel free to correct me, this is just what I understand about this topic
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