Footings

What Are Footings?

In accounting, a footing is the last balance while adding every one of the debits and credits. Debits are tallied, trailed by credits, and the two are netted to compute the account balance. Footings are ordinarily utilized in accounting to determine last balances to be put on financial statements.

Understanding Footings

As business transactions are recorded, accountants enter the amounts for each type of transaction in one of two columns. Every transaction is recorded as either a debit or credit. The debit and credit columns are added, by which the total of every column is a footing.

The two footings are netted together to calculate the account balance for the period. The account balance is the amount that's carried over to the financial statements. The interaction is repeated for each type of transaction. The term "footing" is appropriate on the grounds that the totals are located at the finish of every column.

Illustration of Footings

Let's say the T-account listed below shows the inventory transactions for Macy's (M). Each inventory transaction is recorded during the period in its respective column — whether it was a debit or credit to the inventory account.

Next, the debits in the debit column are all totaled while the credits are all totaled also. The totals, as displayed below, are located below the recently drawn horizontal line, which indicates the totals have been calculated.

The figures $28,200 and $32,000 represent the footings for the debits and credits, respectively.

The two footings are netted together to show up at the account balance for inventory. The net amount is reported on the organization's financial statements for the period.

We can see below that Macy's reported a credit balance of $3,800 for inventory in the period.

Highlights

• Footings are regularly utilized in accounting to determine the last account balances, which are reported on an organization's financial statements.
• When the debits and credits are each totaled, the two numbers — or footings — are netted to compute the account balance.
• In accounting, a footing is the last balance while adding all debits and credits.