The balance of the account is determined by
A) adding all of the debits to all of the credits.
B) always subtracting the debits from the credits.
C) always subtracting the credits from the debits.
D) adding all of the debits, adding all of the credits, and then subtracting the smaller sum from the larger sum.

Question

Quizplus · Accepted Answer

The balance of an account can be determined by calculating the total of all debits and credits and then subtracting the smaller sum from the larger sum. This is because debits increase the balance while credits decrease it. Option A and B are incorrect as they do not take into account the directional effect of debits and credits on the account balance. Option C is also incorrect as it reverses the order of additions and subtractions.

The Balance of the Account Is Determined by