A four-column ledger includes columns for debits, credits, and running balances for both debits and credits. It helps in maintaining a detailed record of transactions and their impact on the account balance.
The formula to calculate the final balance is:
\[ \text{Final Balance} = \text{Total Debits} - \text{Total Credits} \]
Consider the following transactions:
Using the formula:
\[ \text{Final Balance} = 800 - 300 = 500 \, \text{(debit balance)} \]