Oct
16
- An account has a debit balance when its debit total exceeds its credit total
- An account has a credit balance when its credit total exceeds its debit total
- Assets, expenses and drawings accounts have debit balances
- Liability, capital and revenue accounts have credit balances.
- A Trial Balance is a list of debit and credit balances extracted from the accounts in the ledger at a particular date
- The Trial Balance is prepared for the purpose of checing the arithmetical accuracy of the enties made in the ledger
- The total debit balances will be equal to the total credit balances in the Trial Balance if the double-entry principles of recording have been strictly adhered to.
- Errors that affect the agreement of the trial balance totals are wrong calculation of balances,omission of either a debit or credit entry of a transaction, entry on the wrong side of an account and errors in amount.
- Errors that do not affect the agreement of the trial balance totals are complete omission of entries of a transaction errors of commission, errors in principle, compensating errors, complete reversal of entries and errors in original entry.
- Personal accounts record transactions with persons who have dealng with the business for example debtors and creditors accounts