Question

After all of the account balances have been extended to the balance sheet columns of the work sheet, the totals of the debit and credit columns show debits of $37, 686 and the credit of $41,101. This indicates taht

a. True
b. False

Answer 1

An imbalance between total debits and credits after extending account balances to the balance sheet columns indicates an error in the worksheet. To have a balanced balance sheet, total debits must equal total credits, which is not the case presented in the student's question.

Step-by-step explanation:

The student's question seems to be about the discrepancy between debit and credit totals after preparing a balance sheet. When the debit and credit columns in the balance sheet sections of a worksheet are not equal, it indicates an error. The balance sheet must balance, meaning that total debits should equal total credits. In this case, if the debits are $37,686 and credits are $41,101, there is an imbalance of $3,415, which suggests there may be a mistake or omission in the accounting entries.

To correct the imbalance, one would typically review all postings to the worksheet to ensure that all transactions have been recorded correctly and that the balancing process has been completed accurately. This could involve checking the accuracy of the individual entries under the assets, liabilities, and equity accounts, as mentioned similar to the process of creating a T-account balance sheet for a bank as in the provided references.