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You should never have a debit balance in a liability account. Liability accounts maintain a "credit" balance. If a debit balance incurs, it means that the company has paid too much to the account.
For example, say I owe Company B $500 on an account payable (liability) and I for some reason pay them $600 instead, that does actually give me a debit balance, however that also means they owe me $100 since I overpaid them.
If it's a supplier I order from on a regular basis then I can just leave the balance alone and let it balance itself out with the next purchase, making note about "why" there is a debit balance.
However, if it's a company I made a one time purchase from, for example I bought a computer and don't plan on buying another one from the company for a while, it's best if I zero out the balance and move the balance from the liability account into an account receivable (an asset account) and contact that company about the error and a possible refund.
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Does a revenue account normally have a debit balance?
No. A revenue account should always show a credit balance.
Which balance does a cash accounts always show?
In debit balance a cash account always shown.
What is the meaning of accounts payable account balance has increase on the trial balance?
account payable is also called Bils paybal its show cr balance and it is a liability for the business
The type of account and normal balance of Unearned Rent is?
The normal balance of Unearned Rent is typically a liability credit entry. The balance will show up in the post-closing trial of the balance sheet.
What is meant by adjustment entry?
An adjustment is usually an entry made near the end of an accounting cycle (often during the trial balance stage) to bring an account into balance. For instance, the "books" may show a certain quantity on hand -say 1000 units- of supplie, but when you do a physical count you discover there are only 900 units on hand. At this point you will have to make an adjusting entry to the supplies expense account (a credit balance account-the supplies account has a debit balance) of 100 to offset the supplies account and bring the account in balance: Or you can just credit the difference directly into the supplies account: Debit Credit Balance Supplies- 1000 (100) 900
What are accrued expenses reported on the balance sheet as?
As you accrue expenses, they show up as a CREDIT on the balance sheet, and a DEBIT on the income statement. Then as you actually incur the expense and pay out, you would CREDIT your cash account, and DEBIT the accrued liability account on the balance sheet. For example, if you expect to spend $12,000/year on business travelling expenses, you would accrue $1000 monthly as a CREDIT to your accrued liability account (on the balance sheet), then a DEBIT to the expense account (on the income statement). When you actually do incur the expense and pay out, you CREDIT your cash account, and DEBIT the accrued liability account. Thus, the accrued liability account is cleared out and eventually washed out to zero.
Does a revenue account normally have a debit balance?
No. A revenue account should always show a credit balance.
Which balance does a cash accounts always show?
In debit balance a cash account always shown.
What is the meaning of accounts payable account balance has increase on the trial balance?
account payable is also called Bils paybal its show cr balance and it is a liability for the business
The type of account and normal balance of Unearned Rent is?
The normal balance of Unearned Rent is typically a liability credit entry. The balance will show up in the post-closing trial of the balance sheet.
Where does the accumulated depreciation appear on?
Accumulated Depreciation is a liability nature of account to reduce the contra asset from balance sheet that's why it only shows in liability side of balance sheet to show reduction of asset.
What is meant by adjustment?
An adjustment is usually an entry made near the end of an accounting cycle (often during the trial balance stage) to bring an account into balance. For instance, the "books" may show a certain quantity on hand -say 1000 units- of supplie, but when you do a physical count you discover there are only 900 units on hand. At this point you will have to make an adjusting entry to the supplies expense account (a credit balance account-the supplies account has a debit balance) of 100 to offset the supplies account and bring the account in balance: Or you can just credit the difference directly into the supplies account: Debit Credit Balance Supplies- 1000 (100) 900
What is meant by adjustment entry?
An adjustment is usually an entry made near the end of an accounting cycle (often during the trial balance stage) to bring an account into balance. For instance, the "books" may show a certain quantity on hand -say 1000 units- of supplie, but when you do a physical count you discover there are only 900 units on hand. At this point you will have to make an adjusting entry to the supplies expense account (a credit balance account-the supplies account has a debit balance) of 100 to offset the supplies account and bring the account in balance: Or you can just credit the difference directly into the supplies account: Debit Credit Balance Supplies- 1000 (100) 900
How do you know if your debit card still has money on it?
It doesn't exactly have money on it - it simply debits your bank account, so you need to know what your balance (or overdraft) is. If you try to use your debit card in a shop, for example, the checkout will show the sales assistant whether you have enough in your account or not; if not, the purchase will be refused.
What account is affected in an account journal when you return office supplies that was bought on account?
Say I purchsed $500 in Office Supplies on account, I return the office supplies, since I purchased them on account, the company I purchased them from will extend me a credit to my account decreasing the balance I owe them by the said amount. My books will record....Account Payable (debit)Office Supplies (credit)I debit my Account Payable to show that I no longer owe that amount and I credit my Office Supplies to show that I no longer have that amount of supplies on hand.
In accounting why the reverse principle is not possible - debit the the giver and credit the receiver?
The best way to explain this is by example: Wells fargo Bank has your bank account. Your account is a liability for them since this is not truly their money and it is obligated to you the account holder......so when they increase your account, they post a credit to it. Because to increase their liabilities they have to credit it......and when you use your debit card and decrease your account then wells fargo debits your account to remove the money. For you as the account holder your checking account is your asset......so if you were tracking your accounting in a program.....and you wanted to show where you deposited money into your account in your system then you would post a debit to increase your cash account.
Commercial paper may show up on corporate balance sheets as either a current asset or a current liability?
commercial paper is like a bond it will show up on the balance sheet as a asset if there is no lien on it. It will also show as a liability if there is a lien on it.
