All 25 Trial Balance questions
More in Trial Balance
What types of errors ARE revealed by a trial balance? How is the trial balance used to prepare financial statements? How do you locate the difference when a trial balance does not balance? What is the difference between a trial balance and a balance sheet? How do accruals and prepayments affect the figures taken to the financial statements from the trial balance? What is the effect of depreciation on the trial balance and statements? What is the difference between a trial balance error being 'in the trial balance' versus 'in the ledger'? What is an extended trial balance (ETB)? How does closing inventory appear in relation to the trial balance? How do compensating errors affect the trial balance?
Advertisement
Back to results for “Trial Balance”
Bookkeeping › Trial Balance

Why do assets and expenses have debit balances while income, liabilities, and capital have credit balances?

Intermediate

Answer

Because of how double entry increases each: assets and expenses increase with debits (so their balances are usually debit); income, liabilities, and capital increase with credits (so their balances are usually credit). This pattern drives which trial balance column each account falls into.
Real-world example Purchases (expense) sits as a debit; sales (income) sits as a credit in the trial balance.

Common follow-ups: What increases an expense account? | Why is capital a credit balance?

Control Accounts Correcting Errors Trial Balance
All 25 Trial Balance questions