Plugs

One of the most important concepts in accounting is that the sum of all debits ALWAYS equals the sum of all credits.

Sometimes though, records might have been entered improperly. In other cases, they haven't been entered completely.

These situations result in cases for which the debits don't equal credits.

We can't let such situations stand! We need to either correct the entries that are there or add additional debits or credits to ensure that debits equal credits.

Being able to look at a journal entry and figure out whether a debit or credit needs to be added, and how big it should be is a critical skill.

👉 Answer:

👨‍🎓 This is how we solve it:

1. First, let's add up all of the debits.
   8 + 10 + 7 = 25
2. Next, let's add up all of the credits.
   2 + 6 + 10 = 18
3. Now we need to figure out the difference between the two.
   25 - 18 = 7
4. Since the sum of debits is higher than the sum of credits, we know that we'll have to add a credit 7.