An account has a debit balance. The adjustment requires a credit to that account. The debit amount is higher than the credit amount. Is the result in the Adjusted Trial Balance a debit or credit?
The result in the Adjusted Trial Balance is a debit. When the debit is higher that the credit amount of an account resulting to a debit balance, it means that the account has been under-credited during adjustment. That means that to account for the difference between the debit and the credit; one needs to credit the adjusted trial balance with the difference between the debit and credit balances to balance off (Boundless, 2016).
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An account has a debit balance. The adjustment requires a credit to that account. The credit amount is higher than the debit amount. Is the result in the Adjusted Trial Balance a debit or credit?
The result in the Adjusted Trial Balance is a credit. A higher credit balance than the debit amount results to a credit balance. It means the trial balance has been over-credited. So as to cancel off the difference in the trial balance, the trial balance has to be debited with the difference between the credit and debit balance thus the correct entries.
An account has a credit balance. The adjustment requires a credit to that account. Is the result in the Adjusted Trial Balance a debit or credit?
The result in the Adjusted Trial Balance is a debit. The accounting principles dictate that when the balance of an account is a credit, and the adjustment requires a credit, adjusted trial balance has to be debited. This is to counter the necessary credit adjustment hence the debit to the adjusted trail balance.
An account has a credit balance. The adjustment requires a debit to the account. The debit amount is higher. Is the result in the Adjusted Trial Balance a debit or credit?
The result in the Adjusted Trial Balance is a debit. An account with a credit balance will usually require a debit adjustment. However, when the adjustment debit is higher than the credit balance, it means that the adjusted trial balance is over debited. This means that the trial balance should be credited with the differences in debit and credit amounts to balance off the adjusted trial balance (Lumen, n.d).
Why accounts receivables can never have a credit balance
Accounts receivables represent earnings for the company after it has rendered services or sold goods to a customer on credit. When the customers pay the debts, the accounts receivable is credited, and the cash of bank is debited. This means that the goods paid for are taken from the receivable accounts. Therefore, the account receivable cannot have a credit balance. If all the goods were paid for on delivery, then the receivables account would not exist.
Why accounts payable can never have debit balance
An account payable represents a liability for the company. It includes the amount the company owes the suppliers regarding goods purchased on credit. If the company pays the debt, then the payable account is debited, and the cash or bank is credited. This means that the goods have been paid for hence cannot be in the payable accounts. If the company paid for the goods, it purchased the payables account would not exist. Therefore the payable accounts only show unpaid purchases of the company which is credits to the account (Accounting coach, 2017).
References
Accounting coach. (2017). General ledger account: Accounts payable . Retrieved on 6 June 2017 from https://www.accountingcoach.com/accounts-payable/explanation/6.
Boundless. (2016). The trial balance. Boundless Accounting Boundless . Retrieved on 6 June 2017 from https://www.boundless.com/accounting/textbooks/boundless-accounting-textbook/accounting-information-and-the-accounting-cycle-2/the-accounting-cycle-23/the-trial-balance-145-6018/
Lumen. (n.d.). Unit 4: Completion of the accounting cycle: Closing entries. Financial Accounting . Retrieved on 6 June 2017 from https://courses.lumenlearning.com/finaccounting/chapter/journalizing-and-posting-closing-entries/.
