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In a trial balance, if the total of the credit side is greater than the debit si

Practice Questions

Q1
In a trial balance, if the total of the credit side is greater than the debit side, what does this indicate?
  1. Profit
  2. Loss
  3. Error in recording
  4. Liabilities exceed assets

Questions & Step-by-Step Solutions

In a trial balance, if the total of the credit side is greater than the debit side, what does this indicate?
  • Step 1: Understand what a trial balance is. It is a list of all the accounts in the general ledger with their balances.
  • Step 2: Know that in a trial balance, there are two sides: the debit side and the credit side.
  • Step 3: The debit side shows all the amounts that have been debited (added) to accounts.
  • Step 4: The credit side shows all the amounts that have been credited (subtracted) from accounts.
  • Step 5: If the total of the credit side is greater than the debit side, it means there is an imbalance.
  • Step 6: This imbalance suggests that there may be an error in how transactions were recorded.
  • Step 7: Possible errors could include missing entries, incorrect amounts, or misclassifications.
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