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When a ledger account is balanced at the end of a period, the total of the debit side is Rs 85,000 and the total of the credit side is Rs 62,000. What is the correct treatment?

The account has a debit balance of Rs 23,000 because debits exceed credits. To balance, 'By Balance c/d' Rs 23,000 is written on the credit side so both totals equal Rs 85,000, and the balance is brought down on the debit side next period.

  1. AWrite 'By Balance c/d' Rs 23,000 on the credit side, giving a debit balanceCorrect
  2. BWrite 'To Balance c/d' Rs 23,000 on the credit side, giving a credit balance
  3. CWrite 'By Balance c/d' Rs 23,000 on the debit side, giving a credit balance
  4. DWrite 'To Balance c/d' Rs 23,000 on the debit side, giving a debit balance

Explanation

Debits exceed credits by Rs 85,000 - Rs 62,000 = Rs 23,000, so the account has a debit balance. The shortfall is inserted on the credit side as 'By Balance c/d' to make both totals Rs 85,000. The balance is then brought down on the debit side as 'To Balance b/d'. Option 2 wrongly labels a credit-side entry 'To' and the balance as credit.

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