A closing balance is the total in an account at the end of a reporting period. If an account is a permanent account, this amount is carried forward to the beginning of the next reporting period. If an account is a temporary account, this amount is rolled into retained earnings at the end of the fiscal year, and the account balance is re-set to zero.
A closing balance is comprised of potentially hundreds or thousands of transactions that may impact an account during a reporting period. To investigate the reason why a closing balance is a particular amount, one must review the detailed transactions in an account that roll up into the closing balance.