Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 20 - No. 7)
What is the relationship between final debit balances and profit?
Final debit balances include all expenses, which are subtracted from income to determine profit.
Final debit balances represent income, which are added to cost of goods sold to determine profit.
Final debit balances are unrelated to profit.
Final debit balances, with expenses and revenue, are added together to determine profit.
Explanation
Final debit balances represent expenses, and are used to determine profit or loss. Expenses are deducted from income.
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