The amount a buyer owes at closing is equal to the excess of the buyer's debits over the buyer's credits.

The amount a buyer owes at closing is equal to the excess of the buyer's debits over the buyer's credits.

• A. Equals the sum of debits and credits
• B. Equals the difference between debits and credits
• C. Equals the excess of debits over credits
• D. Equals the purchase price minus loan amount

Answer: (C)

The amount the buyer owes at closing is determined by subtracting credits from debits on the closing statement. Debits are the costs the buyer must pay (purchase price, closing costs, etc.), while credits are the funds that reduce what the buyer has to pay (loan proceeds, seller credits, prorations, etc.). The net amount due is the difference between debits and credits. When debits exceed credits, the buyer must bring in the difference to closing. This is described as the excess of debits over credits. If credits were larger than debits, the buyer would receive a credit instead.

The amount the buyer owes at closing is determined by subtracting credits from debits on the closing statement. Debits are the costs the buyer must pay (purchase price, closing costs, etc.), while credits are the funds that reduce what the buyer has to pay (loan proceeds, seller credits, prorations, etc.). The net amount due is the difference between debits and credits. When debits exceed credits, the buyer must bring in the difference to closing. This is described as the excess of debits over credits. If credits were larger than debits, the buyer would receive a credit instead.