Question

1) When a T account has several amounts on both the debit and credit sides, the balance of the account is written

a- on the side with the largest number of item amounts

b- on the side with the smallest number of item amounts

c- on the side with the larger total

d-on the side with the smaller total

2) Which of the following is correct?

a- Debit is the normal balance of the accounts payable account.

b- Credit is the normal balance of the accounts receivable account.

c- Debit is the normal balance of the Income from Services account.

d- Debit is the normal balance of the Drawing account.

3) The trial balance will not expose which of the following errors?

a- Recording only half of an entry and not recording an entire entry.

b- Leaving out an entire entry

c- Recording both halves of an entry on the same side of the T account.

d- Recording only half of an entry.

Answer 1

1. When a T account has several amounts on both the debit and credit sides, the balance of the account is written on the side with the smaller total. This balance is difference between larger total and smaller total. And by writing the balance of the account on the side with the smaller total, we balance this side with the larger total side.

Explanations for other choices:

Number of items on either side of T account are irrelevant.

The balancing is T account is concerned with amounts of the accounting transactions.

The side with the larger total is compared with side with the smaller total while closing    T account.

Thus, the balance of T account is written on the side with smaller total to match with larger total.

2. Correct Statement: Debit is the normal balance of the Drawing account.

Drawing Account is considered as contra account of Capital Account. Capital account have normal credit balance and hence Drawing account has normal Debit balance.

Explanations for other choices:

Accounts Payable is a Liability Account and have normal Credit Balance.

Accounts Receivables is an Asset Account and have normal Debit Balance.

Income from Services Account is an Income Account and have normal Credit Balance.

3. The Trial Balance will not expose an error of leaving out an entire entry.

Leaving out an entire entry will not be exposed while presenting Trial Balance, as both debit and credit effects are left out.

Explanations for other choices:

Errors of Recording only half of an entry and not recording an entire entry, Recording both halves of an entry on the same side of the T account, Recording only half of an entry will be exposed while presentation of Trial Balance. Because, in these cases, Totals of both sides will not be equal. The difference in totals of Debit and Credit sides will be the result of the above cases.