Leaning Online

The difference between the debit and credit side of an Account is called balance of an account and the process of finding the difference between the debit and credit side of an account is called Balancing of An Account . When the debit side of an account, such as an asset account, exceeds its credit side, then there is a debit balance as the total of debit column amount exceeds the total of credit column amount. Similarly, when the total of credit side is more than the total of debit side, then there is a credit balance of an account. The resulted balance, either a debit balance or a credit balance, is the Balance Carried Down (Balance c/d) to be transferred to Trial Balance . If there is a debit balance of an account, then the balance c/d is written on credit side and if there is a credit balance, then it is written on debit side of an account. For example, the balance c/d of a furniture account is Rs. 70000, which must go to Unadjusted Trial Balance for further proc...

The Debit and Credit side of An Account shows increase and decrease or reveals Left or Right Side in an account or Ledger. Both Debit and Credit Sides of Different Types of Accounts are based on the Rules of Debit And Credit while preparing Journal Entries posted to Ledger Accounts or Books of accounts. Ideally, Debit Side is for Assets , Expenses and Losses while Credit Side for Liabilities , Equity and Revenues and Gains / Profits. N ormally, When assets, expenses or losses increase these are on Debit Sides while Liabilities, Equity and Gains on Credit sides. However, when assets, expenses or losses are on credit side, then these are on unfavourable side and these are decreasing or setting off or closed at the end of accounting. For example, an old furniture sold out due to obsolescence or improved technology. All expenses are closed to Income Summary Statement. Similarly, when Liabilities, Equity and Revenues or Gains decrease, then these are on Debit s...