Question

A debit balance in the income and expenditure account denotes excess of _________ over _____________.

• A. income, expenditure
• B. assets, liabilities
• C. liabilities, assets
• D. expenditure, incomes

Answer 1

The correct option is D expenditure, incomes

The account through which surplus or deficit of a non-profit-seeking concern is ascertained, is called Income and Expenditure Account.

Conversely, the balance of the account, if debit, indicates deficit, i.e. excess of expenditure over income.