What is the difference between total debits and total credits in an account known as?

The difference between total debits and total credits in an account is referred to as the account balance. This term reflects the current state of the account after all transactions have been recorded, showing how much is owed or available within that account. When debits exceed credits, the account will have a negative balance (or be in debt), and when credits exceed debits, it denotes a positive balance (or surplus).

Understanding account balance is crucial in accounting as it directly impacts financial statements and the overall financial health of an individual or business. This numerical value is the foundational element that informs decisions related to spending, saving, and investment.

In contrast, net worth refers to the overall value of an individual or entity's assets minus their liabilities. Owner's equity is a specific term used in relation to the value of ownership interest in an entity, often used with businesses. A trial balance is a listing of all accounts with their respective balances, used primarily to ensure that total debits equal total credits—a step in the accounting process that helps identify errors but does not represent the balance of a particular account.