Refer to figures. 
The balance or slip indicator comprises a curved, liquid filled, tube that contains a ball which moves in a similar way to a pendulum. It gives an indication of the state of balance of an aircraft in a turn or straight and level flight. In level flight gravity will keep the ball in the middle, when turning centrifugal force proportional to the TAS and rate of turn also acts on the ball. If the lift is equal to the resultant of the aircraft weight and centrifugal force then the turn is balanced and the ball will stay central. The balance indicator is a stand alone instrument which is often incorporated into the display of a Turn Indicator/Co-ordinator however it gives no indication of the rate of turn.

A properly balanced turn is where the angle of bank is correct for the TAS and rate of turn, too much bank causes the aircraft to slip into the turn and too little bank causes the aircraft to skid, when a turn is balanced the ball will be in the middle.

Slip - If the ball is off centre in the same direction as the turn the aircraft is slipping. Increasing rudder deflection in the direction of the turn (step on the ball) or reducing the bank angle will bring the ball back to the middle.

Skid - If the ball is off centre in the opposite direction to the turn the aircraft is skidding. Reducing rudder deflection in the direction of the turn or increasing the bank angle will bring the ball back to the middle.