Which item normally has a credit balance in a trial balance?
Correct answer: A. Discount received
- A. Discount received
- B. Carriage inward
- C. Trade expenses
- D. Returns inward
Explanation
Discount received is an income, so it normally has a credit balance. Carriage inward, trade expenses and returns inward are generally debit items in 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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