There are a lot of terms in accounting that are incomprehensible and unusual for the common man; sometimes it seems that accountants speak their own language. But if you understand a little, then previously seemingly complex terms will turn out to be simple and understandable.

Debit and credit

Accountants, calculating various cash flows, operate accounts. Experts have developed a table in which every possible expense or income is listed and numbered. This approach makes it easy to describe all internal flows and easily explain what is happening in the company. Some accounts are used very often and in almost any company, others are specific and practically not used.

If there are any machines on the balance sheet of the enterprise, they are posted to the “Fixed Assets” account. Any accountant, opening an accounting of fixed assets, can see and find out their value, when they were received, when they are written off, and much more.

Each account consists of two entries - debit and credit. From an accounting point of view, these are income and expenses. If a company buys new machines, then a record of this will appear in the fixed assets account, indicating the cost, service life, depreciation and various other things. When the machine has completed its service life and is written off for recycling, a record about this will appear in the credit part of the Fixed Assets account.

Balance

Balance is the current account balance. The balance is calculated as follows:

• The balance for the previous period is taken.
• All income transactions on the account are added to it. All transfers and postings that increase the account balance - the purchase of new machines, tools, buildings, and so on.
• All credit entries and transfers are subtracted from the resulting number. Anything that reduces the account balance is a written-off, broken, obsolete instrument.
• The result obtained is the new balance.

Let's assume that the company has ten working machines - this is the balance for the previous period. Last year, the company bought new machines and wrote off two obsolete ones. Debit entries are the purchase of four new machines, credit entries are the write-off of two old ones. Accordingly, when summing up the balance for the previous year, it is necessary to add debit receipts (four machines) to the old balance (ten machines) and subtract credit entries (two machines). We get that the balance according to the results of last year is twelve machines. It is natural that This is an exaggerated example and it is quite far from reality.

Types of balances

Depending on the results, there are two types of balances:

• debit
• credit

If the account balance is positive, then the balance is debit, if negative, then the balance is credit. A credit balance is not always bad for a company. Accounts in the accounting department exist for almost any case; there is an account number that takes into account the debts of external suppliers.

For example, if an enterprise has shipped goods worth a million rubles, but the money has not yet been transferred, a credit balance arises. This situation happens all the time, so there is nothing wrong with it. There is a whole group of accounts that always give a negative balance. In contrast to them, there is a group of accounts that are always positive. For example, any enterprise that produces goods has means of production. These may not necessarily be machine tools; for a programmer, a computer is the same means of production. Therefore, the Fixed Assets account is always positive and can never be negative.

Balance in foreign trade

Much of the assessment of a country as a business partner depends on its business and financial viability, so it is not surprising that the concept of balance is used in the assessment of states. There are two contexts in which the concept of balance is used:

• trade balance;
• balance of payments.

In the first case, all goods that a particular state imports and exports are taken into account. If a country imports a huge amount of imported goods, but produces nothing itself, the trade balance will be negative. This negatively affects the reputation of the state, since it does not have its own production or produces products of very low quality. Therefore, all developed countries strive to improve their trade balance indicators.

The balance of payments is a count of all remittances made to or from a particular country. A negative balance means that money is being taken out of the country and not coming back. Because of this, there is a shortage of funds in the state and the central bank is forced to issue funds. This leads to increased inflation and a deterioration in the country's exchange rate. This situation negatively affects the economy in general and the well-being of citizens in particular.

In accounting, just like in mathematics, accuracy plays a big role. There can be no conventions here. At the same time, many experts call balance one of the most significant terms. We propose to find out what a balance is, whether there is a balance in the economy, and what is commonly understood as a trade balance.

What is a balance in accounting?

Back in the 19th century it was known what a balance was. In those days, the word began to be used as a term calling the balance of funds on all accounts. The meaning remains unchanged today. However, it has now acquired a wider meaning. Previously, it was customary to use it exclusively to indicate the difference between the debit and credit of accounts. Since the 20th century, the use of the term has been able to extend beyond accounting.

This term in accounting is one of the most significant terms. Experts in this field are very well aware of its importance. The balance of payments is the difference that arises between funds spent and funds received over a certain time. For specialists, this concept is broader. The balance is divided as follows:

• debit;
• credit;
• during the period;
• outgoing;
• incoming.

What is an opening balance?

In accounting, it is important to know not only what the term balance itself means, but also what is commonly understood by such terms as incoming and outgoing balance. There is a significant difference between the opening and closing balances, which every accounting professional should definitely see. The ending balance, or, as it is often called, the closing balance, is the account balance at the end of the period. It is usually calculated as the sum of the opening balance and all turnover for the period.

What is an opening balance?

In accounting and economics, accuracy and understanding of basic processes are very important. Any mistake can be fatal. For this reason, accounting professionals must clearly understand what a balance is and what it can look like. The concept of balance is usually divided into incoming and outgoing. The first is understood as what arose during the analysis of account movements for the last analyzed period and at the beginning of a certain period.

Active and passive trade balance

Beginners in accounting and economics often wonder what a balance is and what an active and passive balance is. The first refers to the excess of exports over imports. As for the passive balance, this term refers to the excess of imports over exports. You can often hear about the net balance, which is a situation where exports and imports are equal.

Balance of payments surplus

Accountants call the balance of payments a certain result, which is reflected in the final line of a certain balance sheet of the country, which is presented in the form of a document resembling a balance sheet. It shows both the revenue and expenditure transactions of the government. The balance of payments is divided into active (positive) and passive (negative). The active balance is the balance between the current transactions account and the balance of the funds flow account.

Passive balance of the balance of payments

A negative or, as it is often called, a passive balance does not always indicate a crisis in the state’s balance of payments, since it can often be covered through the movement of entrepreneurial capital. This can be when the country has a normal investment climate for both foreign and domestic entrepreneurs. We can say that a crisis exists if a significant negative balance is regularly covered by foreign exchange and gold reserves.

How to calculate balance?

Not only accountants, but sometimes even ordinary citizens need to understand how to correctly find out the value of the balance. An example of such a situation where it is important to know about its indicator may be the need to calculate it in a receipt for utilities. Accuracy and certain knowledge are important here. However, not every novice accounting specialist knows how to calculate the balance. It is important to know the main points:

1. To calculate this value for material resources, it is necessary to add up all the money received for a certain time and expenses for a given period. In this case, you need to calculate the difference between 2 numbers, which will be the balance.
2. There are formulas with which you can calculate the balance of passive and active accounts:

• by debit = initial balance + debit turnover – credit turnover;
• by credit = initial balance + credit turnover – debit turnover. This difference is considered very convenient when drawing up reconciliation reports.

What is a balance on a receipt?

Not only specialists, but also ordinary people should know about some aspects in accounting. Sometimes even when paying for utilities, a lot of questions and misunderstandings arise, since it is difficult to understand accounting terms. One of them is considered to be the balance. For some it is a clear and simple term, but for others it has a new meaning. It is important for a modern person to understand what the balance in a housing and communal services receipt is.

This value can show the personal account balance at the beginning of this month. And when the value is positive, this indicates an overpayment for utilities. When the number is negative, there are definitely debts. Moreover, this is usually considered after the tenth day of the month following the settlement month. We can say that the balance is considered as an opening balance on the personal account of the residential premises.

Return back to Saldo

When analyzing a company's activities, economists are faced with such a concept as the opening balance.

In general, the balance is calculated as the difference between the debit and credit of an account. The opening balance is determined based on previous transactions.

1. To understand how the balance is calculated, consider a simple example. Let's say you went to the store on April 30th. We bought groceries worth 2,000 rubles. On the same day you received a salary of 10,000 rubles. The next day you went shopping again and spent 1000 rubles. You need to determine the opening balance. This indicator is equal to the final balance of the previous period. Thus, on April 30 you received 10,000 rubles and spent 2,000 rubles. The cash balance at the end of the day will be 10,000 - 2,000 = 8,000 rubles. This amount will be the opening balance on May 1.

2. If you need to calculate the balance of an enterprise, create a card for the required account. Let's say you want to calculate the cash balance of an organization at the beginning of the reporting period. To do this, look at the balance of account debit 50 and credit for the previous period. Calculate the difference. The amount received will be the initial balance.

3. If you use automated programs in your work, you just need to look at the account information. Let's say you want to know the opening balance. Create a card indicating the period from May 1st. The required indicator will be indicated in the very top line. You can also look at it, in which case the balance will be indicated at the very end.

4. If you want to calculate the opening balance manually, select all the necessary documents. Let's say you need to calculate an indicator for accounts payable. To do this, prepare for the previous period all invoices from counterparties, statements of current accounts and cash receipts. On a piece of paper write “Debit” and “Credit”.

Everything you have given is put on the loan; everything you received is on debit. Sum up your expenses and then your income. Calculate the difference. The amount received will be the balance at the beginning of the next period.

Every profession uses specific terminology. Accounting is no exception. However, the number of key accounting terms is actually quite small. Perhaps someone has seen in a bookstore or library one of the so-called “accounting dictionaries” that is amazing in its thickness. In fact, there is some deceit on the part of the compilers of such reference books.

How to calculate the ending balance?

The fact is that many of the words and expressions listed there are not so much of a narrow accounting nature, but rather relate to the sphere of economics and finance in general. Others, although used primarily in the field of accounting, are largely consistent with their “everyday” counterparts and do not require detailed explanation and interpretation. Some words are largely outdated and have more historical interest, but are listed in dictionaries as a tribute to tradition and a memory of the past. For example, the word “openwork” can be found more likely in everyday life, in the stable combination “everything is openwork,” which should mean “everything is in order.” But in its original accounting meaning this word is practically no longer used. It comes from the French "a jour" and means keeping books on a "day to day" basis, where all entries pertaining to the current day are made on that very day. Although the very principle of mandatory daily records may well be applied today, it is extremely rarely called openwork.

What terms are key to accounting? Perhaps, these are, first of all, “balance”, “debit” and “credit”. A curious thing happened here too. The fact is that these words have changed their meaning compared to their original meanings, so their literal translation into Russian may seem somewhat unexpected. To begin with, let's say that the word "balance" comes from the Italian "calculation". Today, the term simply means the balance of an account, such as the balance of money on hand. The balance can be beginning or ending. Beginning balance is the balance at the beginning of the period, ending balance is the balance at the end of the period. The period can be a month, a quarter or a year. To avoid misunderstandings, the period is most often indicated explicitly: “balance at the beginning of the month”, “balance at the first of February”, “balance at the end of the year”. Some theoretical authors use the terms “incoming balance” and “outgoing balance” in their textbooks. The meaning remains exactly the same, but the modified terms acquire a specific clerical sound, look more solid (and also less understandable) and, apparently, claim to have some kind of scientific and theoretical subtext. I think there is no real deep meaning in such linguistic exercises. In practice, according to my observations, accountants often try to use Russian analogues of incomprehensible foreign words. The “beginning balance” simply and without any fuss becomes the “beginning balance,” and the “ending balance” becomes the “ending balance.” This is probably the most reasonable, intuitive and logical option. With this approach, there is completely no need to explain the meaning of the strange word “balance” and report on its Italian roots.

Debit and credit are two more specific accounting terms. The stress in both cases falls on the first syllable: debit, credit. As for the original meaning of these words, a rather strange situation has arisen here too, although somewhat different than with the word “balance”. The authors of textbooks unanimously claim that both terms have already lost their original meaning and are used simply as a designation of parties. Debit on the left, credit on the right. The situation thus comes down to the anecdote given at the beginning of this chapter. I don't entirely agree with this approach. The original meaning in this case is partially preserved (or, one might say, not completely lost). Knowing the roots and origins of “debit” and “credit” is useful, if only to understand who the debtor is and who the creditor is. So, “debit” comes from the Italian “he must,” and credit comes from the Italian “he believes.” Accordingly, the debtor is the one who owes us, and the creditor is the one who believes us (that we will give him his money lent). As you know, the lender's expectations are not always met. 🙂 By the way, novice accountants sometimes confuse the concepts of accounts receivable and accounts payable. If you carefully read what is stated above, you should not have a similar problem:

Accounts receivable are debts owed by debtors to us.

Accounts payable is our debt to someone, i.e. creditors.

And further. Why, after all, “debit on the left, credit on the right”? It is enough to note that we are talking about a technical technique, a certain generally accepted convention. At one time, the location of the records could have been different. For example, in the early Tuscan form of accounting, the page was divided down the middle by a horizontal (rather than vertical) line. In this case, the debit (more precisely, the debit entries of the account) were located at the top, and the credit, accordingly, was at the bottom. However, later, in the Genoese and Venetian methods, the pages began to be divided vertically: this is more convenient. This is what Luca Pacioli writes about this in his famous treatise “On Accounts and Records” (published in 1494 in Venice): “... the debtor’s article is placed on the left, and the trustee’s on the right side.” The obligor and the trustor are the debtor and the creditor, respectively. We’ll talk more about the notebook page, which after dividing into two parts turned into an accounting account, next time we talk about double entry.

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Final balance

What is a balance? Definition, varieties

Publication date

Almost everyone has heard of such a term as balance. What this is, of course, is known to all accountants and economists.

The concept of balance and its functions

But for most ordinary people this word is associated only with the concept of “difference”. The term, which everyone hears, is one of the main ones in accounting theory. In the most general sense, it really means the difference between the receipts of funds and all expenses for a certain period of time. But this concept is actually much broader.

Balance is an Italian word that entered Russian as an accounting term back in the nineteenth century. Literally it is translated as “calculation”, “remainder”, “reckoning”. In the economic sense, the word meant the difference between the amount of debit (receipt account) and credit (expenditure account). By the twentieth century, the meaning of the term had expanded significantly, going beyond the scope of accounting alone. And at the end of the century it had already begun to be used in a figurative sense.

Debit balance- this is a situation in which debit exceeds credit, that is, it shows the balance sheet asset for a given type of economic assets at a certain point in time.

Credit balance- this is a situation in which the credit is greater than the debit, which shows the state of the sources of funds used to conduct business activities and is reflected in the liability side of the balance sheet.

When the difference between debit and credit is zero, the business transaction account is closed.

In practice, as a rule, not the entire accounting history is analyzed from the moment of the establishment of an enterprise or company, but only for a certain period, called the reporting period (month, quarter, etc.).

In this regard, the following concepts are distinguished.

Initial balance(incoming) is the balance of a certain account at the beginning of the period. Calculated based on data from previous operations.

Closing (outgoing) balance is the account balance as of the end date of the period. It is calculated as the sum of the opening balance and all turnover for the period.

Balance for the period– the final result of all operations performed during a specific period.

Credit (or debit) turnover for a period – the total of accounts is calculated only for the required period.

In the modern understanding, as before, as in the nineteenth century, the balance is the difference in the final entries in the debit and credit accounts. But in addition to accounting, today the term is also used in foreign economic relations.

Foreign trade relations are often viewed as the sum of exported and imported goods over a certain period. In this aspect, there are several varieties of it.

Trade balance– the result of calculating the difference in the cost of exports and imports. It is believed that a negative indicator is a bad trend, since it means that the country has a situation in which the market is flooded with imported products, which inevitably leads to the infringement of the interests of domestic producers. However, in practice this is not always the case. For example, the United States, with such indicators, runs its economy quite successfully, being a standard of economic prosperity and stability for the whole world. They have learned to use other tools to resolve such situations.

Balance of payments– the result of calculating the difference between receipts from abroad and payments abroad. A positive indicator means the excess of cash receipts from outside over payments in the opposite direction. A negative indicator indicates that payments from the country exceed money inflows into the country. This means a gradual decrease in the state's foreign exchange reserves. This situation can only be avoided if such calculations are made exclusively in the national currency of the country.

Balance

The word was borrowed from Italian at the end of the 19th century. Originally used as a professional accounting term meaning the difference between the amount of the incoming account (debit) and the amount of the outgoing account (credit). In the first half of the 20th century, the range of meanings expanded, going beyond the narrow accounting term.

How to calculate balance?

In the second half of the 20th century, the word began to be used in a figurative sense. At the same time, the meaning of the word does not lose connection with its etymon.

Italian word saldo — calculation, balance, difference, balance. It is noteworthy that translated into English the balance is - balance. The origins of the Italian word saldo come from the Latin solidus strong, hard, dense. What is the connection between the content of the first and second groups of words? As the version can be assumed - through the word safe safe — the same Latin roots - salvus safe, healthy as well as solidus.

The modern meaning of the concept in accounting has not changed. Balance - the difference between the totals of the debit and credit entries of accounts.

New area of ​​use of the concept— foreign economic relations and, above all, the problems of the general balance of payments. The balance in foreign trade relations means the difference between the sum of exports and imports or the sum of claims and obligations.

Difficulties in use, the concepts are associated with the following phrases.

Debit balance- debit is greater than credit - reflects the state of this type of economic assets on a certain date and is shown in the balance sheet asset.

Credit balance- credit is greater than debit - reflects the state of sources of economic funds and is shown in liabilities.

The concept of “balance” has an errative(from Latin errare- “to be mistaken”) is a paired word subjected to deliberate distortion. This concept is bulldo. Its appearance is due to the fact that the traditional pair of accounting terms “debit-credit” is rhythmically supplemented by the pair “balance-buldo”. It is not a term.

Sometimes experienced accountants jokingly use the word “bulldo” to mean “ inaccurate, estimated, preliminary balance“, sometimes - in the meaning of “the discrepancy between the expected and actual balance” (depending on the tradition that has developed at a given enterprise). But most often - as a question to novice specialists in the form of “What is a bulldo?”

Related concepts:

AccountFair valueLiabilitiesBalance sheetIntangible assetsBachelorCapital adequacy ratio

Accounting, Import, Credit, Liability, Export
Accountancy, Credit, Export, Import, Liability
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How to determine the opening balance

Expert Advice - Financial Advisor

Photos on the topic

When analyzing a company's activities, economists are faced with such a concept as the opening balance. In general, the balance is calculated as the difference between the debit and credit of an account. The opening balance is determined based on previous transactions. Just follow these simple step-by-step tips and you will be on the right track in solving your financial issues.

Quick step by step guide
So, let's look at the actions that need to be taken.

How to find the ending balance - find the ending balance, calculate the ending balance... 01/03/2012

Step - 1
To understand how the balance is calculated, consider a simple example. Let's say you went to the store on April 30th. We bought groceries worth 2,000 rubles. On the same day you received a salary of 10,000 rubles. The next day you went shopping again and spent 1000 rubles. You need to determine the opening balance. This indicator is equal to the final balance of the previous period. Thus, on April 30 you received 10,000 rubles and spent 2,000 rubles. The cash balance at the end of the day will be 10,000 - 2,000 = 8,000 rubles. This amount will be the opening balance on May 1. Next, move on to the next step of the recommendation.

How to determine balance - accounting account 04/23/2012

Step - 2
If you need to calculate the balance of an enterprise, create a card for the required account. Let's say you want to calculate the cash balance of an organization at the beginning of the reporting period. To do this, look at the balance of account debit 50 and credit for the previous period. Calculate the difference. The amount received will be the initial balance. Next, move on to the next step of the recommendation.

Step - 3
If you use automated programs in your work, you just need to look at the account information. Let's say you want to know the opening balance as of May 1, 2012. Create a card indicating the period from May 1st. The required indicator will be indicated in the very top line. You can also view it by setting the period to April 30, 2012, in which case the balance will be indicated at the very end.

What is a balance in accounting?

How to determine the final balance on passive accounts - passive account, of course... 01/03/2012

Step - 4
If you want to calculate the opening balance manually, select all the necessary documents. Let's say you need to calculate an indicator for accounts payable. To do this, prepare for the previous period all invoices from counterparties, statements of current accounts and cash receipts. On a piece of paper write “Debit” and “Credit”. Everything you have given is put on the loan; everything you received is on debit. Sum up your expenses and then your income. Calculate the difference. The amount received will be the balance at the beginning of the next period.
We hope the answer to the question - How to determine the opening balance - contained useful information for you. Good luck to you! To find the answer to your question, use the form - Site search.

Key tags: Finance

So, balance - the result obtained from subtracting the debit and credit accounts. In other words, this is the difference. And this difference can be debit or credit.

Business balance is the state of certain business assets on a specific date. Information about this is provided in that part of the balance sheet called “”. The loan balance shows us the sources of business funds, i.e. where did they come to us from? In turn, this information is provided in the part of the balance sheet called “Liability”.

In its absence, i.e. when the difference between debits and accounts is zero, the account for this business transaction is closed. I would like to note that the scope of use of balances is not limited to accounting. In addition, it is used on exchanges, as well as in trade balances.

Accounting for Beginners

When carrying out foreign trade operations, the balance is the result of subtracting the amounts of imports and exports. If it is positive, then this indicates an excess of exports over imports. Conversely, a negative indicates that the amount of imports is greater than the amount of exports.

If the balance of payments has a positive balance, it means that a certain country received more transfers than it made payments to other countries.

In the case of a negative balance, the opposite is true - the amount of payments exceeds the amount of receipts.

To simplify understanding of the calculation methodology, consider the following situation.

Imagine that on April 30 you went to the store. You bought groceries there, spending 2,000 rubles on everything. On the same day you were given a salary, the amount of which was 10,000 rubles.

The next day you again needed to go to the store, as a result of which you spent another 1000 rubles.

Now let's try to determine the opening balance. This value will correspond to the final balance of the previous period.

Thus, the amount of funds received on April 30 was 10,000 rubles, and the amount spent was 2,000 rubles. Let's calculate the cash balance at the end of May: 10,000 - 2,000 = 8,000 rubles.

In economics, the term balance is actively used. Translated from Italian, the word is translated as “remainder.” The balance is a negative or positive indicator depending on the difference that arose between the expenses and receipts of the enterprise in a certain time period.

Initially, the concept appeared in accounting, but then it began to be used when considering economic relations and connections with other states. Let's consider both areas separately.

Using balances in accounting

The classic meaning of the term “balance” implies the difference in monetary amounts arising between receipts on the company’s balance sheet and debits from its account. Whether positive or negative, the balance objectively shows the financial condition in which this particular enterprise was currently located.

Balance in accounting exists in two types:

• Debit balance. If the income of funds, that is, the debit, exceeds the expenses, this balance appears. In this case, the indicator is reflected in a special column of financial assets.
• Credit. If the enterprise's expenses, credit, turned out to be higher than income, then data about this is entered in a special liability column. If the balance is zero, the account is closed. There are cases when two types of balances are relevant for one account.

Assets and liabilities are the two components of a balance sheet. Assets can be financial, tangible and intangible. In the case of balances, we are talking about financial assets. Liabilities include current and long-term obligations of the company, which she must deal with sooner or later.

Accounting methods consider it irrational to thoroughly study the history of accounts starting from the first day of a company's existence. For calculations, a strictly defined period of time is taken, for example, a month, quarter or year.

There is a special classification based on the time period from which it is calculated.

• Opening balance. In this case, the balance is calculated at the beginning of a specific unit - year or month.
• Balance for a certain period. This is the remainder that was saved during a specific period of time.
• Closing balance. It refers to the balance obtained at the end of the month, year or quarter. In order to calculate this type of balance, you should add the opening balance and the turnover indicator from this part of the account, and then subtract from it a similar indicator located in another part.

Trade and payments balance

When carrying out foreign trade, the balance refers to the difference that arises between the amounts of exports and imports over a strictly defined time period. Most often, this period is taken to be one year, but it can be different.

There are two main types of balances in this area:

1. Balance in relation to the trade balance.
2. Balance in relation to the balance of payments.

The difference that arises between the value of goods exported and imported is called the trade balance. The indicator can have not only positive but also negative values.

The trade balance indicator itself is no less important. Its analysis is based on its application to a specific area of ​​commerce, class of goods or state.

If exports exceed imports, the situation is such that the state sends more goods abroad than it buys. In this case, a positive balance arises, characterizing the state’s economy as stable. After all, the country does not need most imported goods, which means its economy is capable of independently serving the interests of the country. At the same time, the exporter plays an important role in the world market and makes good money from it.

A negative balance is an alarm bell for the state, because exports are less than imports. This means that the state is not able to provide itself with certain categories of goods in the required quantity, which means its food independence is under threat. Also, low exports may arise due to the weak capabilities of the local economy and the lack of competitiveness of manufactured products. Because of such a balance, the exchange rate may collapse.

In some cases, a negative balance characterizes the economy in a positive way. For example, in the USA and some European countries it is negative, but at the same time the growth of inflation is slowed down, and most of the production goes to the domestic market instead of export. All complex production is located in developing countries.

The balance of payments depends on the previous indicator. It represents the difference between the amount of payments from abroad and the amount of payments abroad. If the inflow of funds is greater than their outflow, then the balance is positive. And if the state spends more money abroad than it receives, then the balance is negative.

A negative balance of payments has a bad effect on the national currency, depreciating it. Most developed countries prefer to have a positive balance.