How is the balance of T-account determined? Must it always be on the increase side of...

How is the balance of T-account determined? Must it always be on the increase side of the account? Explain in 100-150 words

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Expert Solution

The T Account is one of the methods of representing the Account. The left hand side of the T Account is always debit and the right hand side of the T account is always credit. Debit and credit in different scenarios may imply different impacts on the balance of the accounts. The debit for an asset account implies increase and credit in an asset account is decrease in the balance of that account. Whereas in case of liabilities a debit implies decrease and a credit implies increase. The 'T' shaped accounts are balanced at regular intervals and the time period for balancing depends upon the practice of the organization, say daily, weekly and monthly. When balancing, usually we add all the line items on a particular side for both the sides and we will see which side has more amount. The side with more amount is said to be the balance side of the account and the difference between the amounts is said to be the balance of the account. So the balance of a T-Account is always determined depending on the increase side of the account.

ekkarill92 answered 7 months ago

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