CMA Foundation · Fundamentals of Financial and Cost Accounting · Trial Balance
In the 'totals method' of preparing a trial balance, what is entered in the debit and credit columns for each ledger account?
In the totals method, each ledger account is shown with the total of its debit side in the debit column and the total of its credit side in the credit column, rather than the net balance. The balance method is the one that shows only net balances.
- AOnly the closing balance of each account
- BThe total of the debit side and the total of the credit side of each accountCorrect
- COnly the opening balance of each account
- DThe difference between debit and credit totals, shown on the larger side
Explanation
Under the totals method every ledger account is represented by its total debit amount and its total credit amount. The balance method, by contrast, shows only the net balance of each account. Option A and D describe the balance method, so they are wrong.
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