A company's trial balance shows total debits of \$45,000 and total credits of \$42,500. If the only missing account is 'Accounts Receivable,' what is the correct balance for 'Accounts Receivable' to balance the trial balance?

• A. \$2,500 credit
• B. \$42,500 debit
• C. \$45,000 credit
• D. \$2,500 debit

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the concept of a trial balance. A trial balance is a summary of all ledger accounts, showing their debit and credit balances. For the trial balance to be balanced, the total debits must equal the total credits.
2. Step 2: Identify the discrepancy in the trial balance. The total debits are \$45,000, while the total credits are \$42,500. This means there is a difference of \$45,000 - \$42,500 = \$2,500.
3. Step 3: Determine the missing account. Since the trial balance is unbalanced, the missing account ('Accounts Receivable') must be added to the side that is currently lower (credits) to balance the trial balance.
4. Step 4: Analyze the nature of 'Accounts Receivable.' Accounts Receivable is an asset account, which typically has a debit balance. To balance the trial balance, the missing amount must be recorded as a \$2,500 debit.
5. Step 5: Verify the solution. Adding \$2,500 to the debit side ensures that the total debits (\$45,000 + \$2,500) equal the total credits (\$42,500 + \$2,500), thereby balancing the trial balance.