Definition
Brought forward (b/f) is an accounting term used to describe an amount or balance that has been carried over from the previous page or the previous period in the financial records, particularly in ledgers and journals. This practice helps in maintaining continuity, ensuring that the sums of all previous transactions are included in current calculations.
Examples
Example 1:
An accountant is maintaining a ledger and at the end of one page, the total amount is $5,000. This total needs to be carried over to the next page, recorded with the description “brought forward” to indicate that this amount is continuing from the previous page.
Example 2:
In a monthly expense report, the total expenses from January amount to $10,000. On February’s report, the balance of $10,000 would be noted as “brought forward” at the beginning of the new period to reflect the ongoing total from the previous month.
Frequently Asked Questions (FAQs)
What is the purpose of ‘brought forward’ in accounting?
The purpose of ‘brought forward’ is to ensure the continuity of financial records. It allows for tracking the cumulative total of amounts over multiple pages or periods, ensuring that no data is lost in the transition from one period/page to the next.
Where is ‘brought forward’ recorded in financial documents?
‘Brought forward’ is typically recorded at the top of a new page in ledgers or journals, or at the beginning of a new accounting period, clearly indicating that the figure is a continuation of a previous total.
How does ‘brought forward’ differ from ‘carried forward’?
‘Brought forward’ (b/f) refers to the beginning of a new page or period with the previous total, while ‘carried forward’ (c/f) points to the end of a page or period and indicates the amount to be moved to the next page or period.
Can ‘brought forward’ be used in both manual and electronic accounting systems?
Yes, the concept of ‘brought forward’ can be applied in both manual bookkeeping and electronic accounting systems to maintain continuity in financial records.
What happens if ‘brought forward’ amounts are incorrect?
If ‘brought forward’ amounts are incorrect, it can result in discrepancies within the financial records, leading to potential errors in financial reporting and mismanagement of funds.
Related Terms
Carried Forward (c/f)
Definition: An amount that is moved or transferred from one period to the beginning of the next period to maintain continuous tracking of financial transactions.
Balance Forward
Definition: Similar to ‘brought forward,’ this term refers to the ending balance of one accounting period that becomes the starting balance of the next period.
Ledger
Definition: A book or other collection of financial accounts where all transactions are recorded.
Journal
Definition: A detailed account that records all the financial transactions of a business, to be then transferred to the ledgers.
Online References
- Investopedia - Balance Sheet Definition
- The Balance - Understanding General Ledgers
- Accounting Coach - Financial Statements
Suggested Books for Further Studies
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“Accounting Made Simple: Accounting Explained in 100 Pages or Less” by Mike Piper
- Overview of basic accounting principles and concepts, including bookkeeping practices like ‘brought forward.’
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“Bookkeeping All-In-One For Dummies” by Lita Epstein, John A. Tracy
- Comprehensive guide to bookkeeping, financial reporting, and the use of ‘brought forward.’
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“Principles of Accounting” by Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
- A detailed explanation of accounting principles and the importance of accurately maintaining financial records.
Accounting Basics: “Brought Forward” Fundamentals Quiz
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