Question

Excess of debit side total of an account over its credit side total is called _____.

• A. debit balance
• B. credit balance
• C. equal balance
• D. nil balance

Answer 1

The correct option is A debit balance

Accounts in the ledger are periodically balanced, generally at the end of the accounting period, with object of ascertaining the net position of each amount. Balancing of an account means that the two sides are totaled and the difference between them is shown on the side, which is shorter in order to make their totals equal.

The words 'balance c/d' are written against the amount of the difference between the two sides. The amount of balance is brought (b/d) down in the next accounting period indicating that it is a continuing account, till finally settled or closed.

In case, the debit side exceeds the credit side, the difference is written on the credit side and is called as debit balance.

If the credit side exceeds the debit side, the difference between the two appears on the debit side and is called credit balance.