Question

After preparing the firm's trial balance, cole's accounting staff notices that the total of the debit column is $52,500, while the total of the credit column is $40,900. what does this finding suggest?

Answer 1

In this case the total of debit column is more than that of credit column. It can be because of two situations. One situation is that the expenses are recorded twice or more in the books in the account due to which the debit side is coming more than the credit side. Or other way around, the income has been recorded less than what needs to be actually recorded.Hence there is an accounting error committed in this scenario.