Question

journal entry for bebit balance bought through​

Answer 1

Debits Increase Cash

The entry to record the opening balance of cash always requires a debit entry equal to the amount of cash your company receives. However, the trickier side of the journal entry is crediting the appropriate account.

Answer 2

Your answer

is posted to the debit side of the account and credit side of the journal entry is posted to the credit side of the account. After the ledger posting, accounts are closed and their balances are found out.

There are three possibilities while striking the balance in an account:

1. The two sides of the account are equal, or

2. The debit total is greater than the credit total, or The credit total is greater than the debit total.

3 If the two sides of an account are equal, it indicates the equality of benefits received and given by that account. The account can be closed as there is no balance in that account. If debit side total of an account is greater than the credit total, then the account indicates a “Debit Balance”. If the credit side of an account is greater than the debit total, then that account indicates a “Credit Balance”.

The procedure to balance an account is:

A. Total both the sides of the account, on rough sheet of paper.

B. Find out the difference between the total, i.e., credit side and debit side. The difference is called “Balance”.

C. Enter (write) the difference (balance) in the lesser side as Balance c/d (carried down) as the last item, and on the last date of the month.

D. Now, both the sides are equal in total. Write the totals which are equal and close the account.

The balance is afterwards taken to the opposite side and entered as Balance b/d (brought down) on the first day of the next month.

Significance of Balances:

The word “Balance” which is the difference between the two sides of an account or the differ­ence between total debits and total credits indicates the net effect of all transactions relating to that account during a given period. In case an account in the ledger shows the same totals on either side, there will not be any balance at all.

Hope this helps you