A ledger account has total debits of Rs. 96,000 and total credits of Rs. 71,000 before balancing. What amount is transferred to the trial balance for this account?
Correct answer: A. Rs. 25,000 on the debit side
- A. Rs. 25,000 on the debit side
- B. Rs. 25,000 on the credit side
- C. Rs. 71,000 on the debit side
- D. Rs. 96,000 on the credit side
Explanation
The account has a debit balance of Rs. 25,000, calculated as Rs. 96,000 minus Rs. 71,000. The balance, rather than either total, is entered on the debit side of the trial balance.
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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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