For most accounting entities in the United States, variances are neither debits nor credits, because variances are not recorded on the books of a business. A variance is simply the difference between what we expected the business to earn or spend and what it actually did earn or spend. Only the things that actually did happen are recorded on the books. But the amount we had expected to earn at the beginning of the year can be found in the budgets, forecasts or plans we created for the year when we set up budgets for the year. The difference between what we budgeted for and what actually happened is called the variance from budget. For example, if at the beginning of 2008, we projected that we would have total sales of $5 million dollars for the entire year, but twelve months later, we found that we had had only $4 million in sales in 2008, there is a variance of $1 million dollars, and it is unfavorable, because we actually had less sales revenue than we thought we would earn at the beginning of the year. But if our actual sales for 2008 totalled $6 million, the variance would still be $1 million, but it would be a favorable variance, because we made $1 million more in sales ($6 million) than we originally thought we would (5% million). If actual expenses are higher than the budgeted amount, the difference between the two amounts is an unfavorable variance, because we spent over budget, which reduces our profits. However, if actual expenses are lower than the budgeted amount, the difference is a favorable variance, because we were able to spend less than we thought we would have to, and our profits would be higher.
A balance sheet should be equal debits and credits at the end of it. Your debits are what you spend. Money on expenses or just about anything. Credits is assets/money/capital credited to accounts. Credits must equal the debits.
debits expense accounts and credits contra accounts
By indenting
If you do a Trial Balance and your Credits Equal your Debits, then more than likely your books are correct.In double entry accounting the debits and credits must balance or be equal.
credits exceeds the debits
done to check the equality of debits and credits
1. Debits Sales Returns, credits Cash 2. Debits Inventory, credits COGS
A balance sheet should be equal debits and credits at the end of it. Your debits are what you spend. Money on expenses or just about anything. Credits is assets/money/capital credited to accounts. Credits must equal the debits.
debits expense accounts and credits contra accounts
If you do a Trial Balance and your Credits Equal your Debits, then more than likely your books are correct.In double entry accounting the debits and credits must balance or be equal.
By indenting
credits exceeds the debits
Debits. Liabilities have credit balances so a debit will reduce such a balance.
False
By using carbon credits and debits
At the end of the period, double-entry accounting requires that debits and credits recorded in the general ledger be equal.
If unequal amounts of debits and credits are found in this step, the reason for the inequality is investigated and corrected before proceeding to the next step.