Does Accounts Receivable Have A Credit Balance

Yes, there are unusual reasons due to which Accounts Receivable / Debtor Accounts or Accounts Receivable Control Account have a credit balance. It may happen when customers pay too much amount than the amount due from them. The reason behind it that there may be mistake in original invoice i.e., wrong figure of amount, missing figures, etc., or the customers returned the goods, etc.

In such case, the accounts receivable account shows negative or unusual balance. When the error or mistakes are solved, then it again shows debit balance which is a normal and usual balance for the business.

How To Show Credit Balance of Debtors In Balance Sheet

As we received advances from our customers, so these are shown under Current Liabilities Section as a Advances From Customers Account in order to remove the effect of negative or credit balance from debtors / accounts receivable account.