accounting

The beginning financial position in a ledger is the starting point for a company’s record-keeping. It’s the balance of all accounts that are carried over from the previous financial year to the current one. The ledger will typically start with a listing of all assets, liabilities, and equity (the equation: Assets = Liabilities + Equity). The starting balances are typically derived from a company’s balance sheet and are listed as of the beginning of the current period (e.g., January 1st of the current year). Each asset account will have the original balance carried over from the prior year, and each liability, revenue, and expense account will have a starting balance of zero. Equity, meanwhile, is derived from all prior year’s activities and is the difference between assets and liabilities.