If the debit side of a ledger account exceeds its credit side, where is the balance c/d entered before the account is closed?
Correct answer: B. On the credit side
- A. On the debit side
- B. On the credit side
- C. In the journal only
- D. In the trial balance only
Explanation
The balance c/d is placed on the side with the smaller total to make both sides equal. Therefore, a debit excess is balanced by entering the amount on the credit side.
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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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