Question

Give one word/term or phrase for each of the following statements.

Debit balance of Trading Account.

Answer 1

Debit balance of Trading Account- Gross Loss

Explanation:
The debit balance of Trading Account implies that the debit side of the Trading Account exceeds its credit side. The excess of debit balance over credit balance is termed as gross loss. It indicates that the operating expenses of the business exceed the operating revenues, and the firm has incurred losses as a result of buying and selling goods during an accounting period. It will be transferred to the debit side of the Profit & Loss Account.