A credit balance brought forward in a ledger account is recorded on which side of the account?
Correct answer: B. Credit side as balance b/d
- A. Debit side as balance b/d
- B. Credit side as balance b/d
- C. Debit side as balance c/d
- D. Credit side as balance c/d
Explanation
A credit balance brought forward is entered on the credit side as balance brought down. Balance c/d is used at the close of the period, whereas balance b/d represents the opening balance of the next period.
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About Ledger Accounts and the Trial Balance
Ledger accounts collect transactions under individual headings and use debit and credit sides to determine balances. The trial balance lists those balances to check arithmetical agreement before financial statements are prepared, but it does not reveal every error, such as complete omission, compensating errors or entries made in the wrong account.
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