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unit-2-the-accounting-process

Unit-2 The Accounting Process

This unit discusses how various transactions are recorded in the Journal and how they will be posted into the concemed ledger accounts.

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What do you mean by a debit balance of an account?

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Learning Pundits Content Team

Written on Apr 16, 2019 12:35:14 PM

  • When it shows a debit balance, it means that the party owes that amount to the business and he is a debtor to the business. Similarly, when it shows a credit balance, it would mean that the business owes that amount to him and he is a creditor of the business. If, however, the account shows a nil balance, it means that the account has been cleared, nothing is due to him or due from him.
  • Note that the accounts which relate to expenses or losses will show a debit balance; whereas those relating to incomes and gains will have a credit balance. This is because all expenses and losses are debited and all incomes and gains are credited.