Colorado Broker Practice Test

The buyer's closing statement shows the purchase price as which?

Debit to Buyer Credit to Buyer Debit to Seller Credit to Seller

Correct Answer:

Debit to Buyer

Explanation:

In a closing statement, the purchase price is what the buyer must pay at closing. Debits are amounts the buyer brings to closing, while credits are amounts the buyer receives or that reduce what they owe. Since the buyer is paying the purchase price to the seller, that amount is recorded as a debit to the buyer. The seller would see the purchase price as a credit because that money is being received by them. So the purchase price on the buyer’s closing statement is a debit to the buyer.

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