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What does a trial balance indicate if the total debits exceed total credits?
What does a trial balance indicate if the total debits exceed total credits?
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What does a trial balance indicate if the total debits exceed total credits?
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If total debits exceed total credits, it indicates there may be an error in accounting that needs to be investigated.
Questions & Step-by-step Solutions
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Q: What does a trial balance indicate if the total debits exceed total credits?
Solution:
If total debits exceed total credits, it indicates there may be an error in accounting that needs to be investigated.
Steps: 5
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Step 1: Understand what a trial balance is. It is a report that lists all the accounts and their balances in a company's accounting system.
Step 2: Know that in accounting, every transaction has a debit and a credit. Debits and credits should always balance out.
Step 3: Check the total debits and total credits in the trial balance.
Step 4: If the total debits are greater than the total credits, it means something is wrong.
Step 5: This imbalance suggests that there may be an error in the accounting records that needs to be found and fixed.
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