uninvitedguest

Yeah the terminology

the books are balanced, there are just more debits than credits

is the opposite of everything discussed above.

A loss is not an imbalance of debits and credits, but how much of those debits end up in expenses and the credits end up in revenue.

DR Expense $1,000
CR Cash $1,000

With no other activity in a period, that is a $1,000 loss funded by cash.

DR Expense $1,000
CR Loan $1,000

Is a loss funded by borrowings.

DR Sales Discounts $1,000
CR Sales Revenue $1,000

Is 0 profit/expense as the sale was marked down to 0 (assuming no cost of sales).

You can’t have balanced books where there are more debits than credits. That would be out of balance.

Balanced means debits = credits.