My Learning Cart
?
Categories
Account

If a company has a trial balance showing total debits of $50,000 and total credi

₹0.0
Login to Download
  • 📥 Instant PDF Download
  • ♾ Lifetime Access
  • 🛡 Secure & Original Content

What’s inside this PDF?

Question: If a company has a trial balance showing total debits of $50,000 and total credits of $48,000, what does this indicate?

Options:

  1. The accounts are balanced
  2. There is an error in the accounts
  3. The company is profitable
  4. The company has a cash surplus

Correct Answer: There is an error in the accounts

Solution: 

A trial balance showing total debits of $50,000 and total credits of $48,000 indicates that there is an error in the accounts, as they should be equal.

If a company has a trial balance showing total debits of $50,000 and total credi

Practice Questions

Q1
If a company has a trial balance showing total debits of $50,000 and total credits of $48,000, what does this indicate?
  1. The accounts are balanced
  2. There is an error in the accounts
  3. The company is profitable
  4. The company has a cash surplus

Questions & Step-by-Step Solutions

If a company has a trial balance showing total debits of $50,000 and total credits of $48,000, what does this indicate?
  • Step 1: Understand what a trial balance is. It is a report that lists all the balances of the company's accounts, showing total debits and total credits.
  • Step 2: Identify the total debits and total credits from the trial balance. In this case, total debits are $50,000 and total credits are $48,000.
  • Step 3: Compare the total debits and total credits. They should be equal for the accounts to be correct.
  • Step 4: Notice that total debits ($50,000) are greater than total credits ($48,000). This means there is a difference of $2,000.
  • Step 5: Conclude that the difference indicates an error in the accounts, as the total debits and credits should always match.
  • Trial Balance – A financial statement that lists all the balances of the general ledger accounts, with total debits equal to total credits.
  • Accounting Errors – Mistakes in the accounting records that can lead to discrepancies in the trial balance.
Soulshift Feedback ×

On a scale of 0–10, how likely are you to recommend The Soulshift Academy?

Not likely Very likely
Home Practice Performance eBooks