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In double entry accounting system any transaction should be equal for both debit as well as credit side to be recorded otherwise no business transaction can be recorded. This assures the basic accounting equation as well.
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If a company has overdrawn its bank balance then?
The amount of the debits must equal the amounts of credits
Theory of debit and credit?
The Debit Credit Theory states that all Debits must be equal to all Credits. (aka when you debit something, you have to credit the same amount, to make it balance)
What is the Florentine and the Venetian approach to reporting?
The Venetian style of reporting, puts the debits on the left side of the accounting sheet, across credits. It uses several cross-indexed books. This style became the model for the ledger sheets of today. In the Florentine style, at least one item is debited, and one credited. In this system the total number of debits is equal to the total number of credits.
What is offset clause?
Offset clause is a provision in an agreement which allows for debits to be balanced against credits. This is most often found in insurance policies.
What is the meaning of net of bank charges when receiving an invoice?
These are the total charges that the bank has received. They should include all the debits and credits you have used.
How do you read a balance sheet?
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.
What if Trial balance debits and credit equals?
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.
What does a balance sheet proves?
the debits and credits equal in general ledger
What do debits and credits look like at the end of a period in double-entry accounting?
At the end of the period, double-entry accounting requires that debits and credits recorded in the general ledger be equal.
When a worksheet is complete Adjusted columns should have?
total debits equal total credits
When a worksheet is complete the adjustment columns should have?
total debits equal total credits
If a company has overdrawn its bank balance then?
The amount of the debits must equal the amounts of credits
What is done to check the equality of debits and credits?
done to check the equality of debits and credits
Can Journal entries can have more than two accounts as long as the debits equal the credits?
yes
What is Proof that the dollar amount of the debits equals the dollar amount of the credits in the ledger means?
The dollar amounts of debits equals the dollar amount of credits in the ledger of a balance sheet. When these two values are equal, the budget is balanced.
When a customer returns merchandise purchased on credit the retailer debits?
1. Debits Sales Returns, credits Cash 2. Debits Inventory, credits COGS
Should debits equal credits when making a journal entry?
Total Debit should equal to Total Debit at all times.
