What is the purpose of using 'To' and 'By' in ledger accounts?

'To' indicates the account being debited, while 'By' indicates the account being credited in the ledger.

Explain the process of determining the balance of an account.

Determine account balance accurately.

• Total debits and credits.

• Subtract smaller total from larger.

• Identify debit or credit balance.

Fill in the blank: The term 'c/d' in accounting stands for ___ and signifies that the balance is ___ to the next accounting period.

'carried down'; carried forward

True or False: Nominal accounts carry their balances into the next accounting period.

False. Nominal accounts do not carry a balance; their end balances are transferred to the profit and loss account.

What is the significance of the 'To Balance c/d' notation in ledger accounts?

It indicates the credit balance carried down to the next accounting period, ensuring both sides of the account are equal.

Fill in the blank: The balances of personal and real accounts are reflected in the ___ at the end of the accounting period.

Balance sheet

What does the 'By balance b/d' notation signify in the ledger?

It indicates the opening balance that is brought down from the previous accounting period for a credit account.

True or False: Balancing an account involves only adding the debit side.

False. Balancing an account requires totaling both the debit and credit sides to determine the balance.

What happens to the balances of nominal accounts at the end of the accounting period?

They are transferred to the profit and loss account, reflecting the overall financial performance during that period.

Fill in the blank: A credit balance in an account indicates that the total on the ___ side exceeds the total on the ___ side.

Credit; debit