A zero balance account is an account that will have a zero balance after closing entries have been journalized and posted. This is different than when you are doing your accounting to see if you had a profit or loss for the year because it reflects what actually happened in the company’s accounts.
It will show up as either a credit or debit on the balance sheet depending on whether there was more money going out of, or coming into, this type of account during the time period being looked at. The content title and description suggest that this blog post discusses how to close an entry with no remaining balances once all entries have been processed through journals and posted: Closing Entries With Zero Balances.
The following sentences should be continued: Accountants need to make sure all entries have been processed through journals and posted before they close an account. If the business has never had any transactions, then closing its accounts is as easy as transferring funds from savings into checking in order to bring that balance back up to zero.
But if there are already balances on those accounts, you’ll want to transfer money out of these other accounts until again reaching a $0 balance. At this point, it’s safe for you to move the remaining funds over without worrying about accidentally creating another transaction with a debit or credit amount greater than what was originally entered at some earlier time period. This way everything will settle evenly and nothing will get left behind.