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The normal or usual b ala nce of Creditors Control Ledger Account or Accounts Payab le Control Ledger Account is Credit. However, there are some reaso ns, suc h as overpayme nts to suppliers, creditors or vendors, wrong amounts entered, etc., due to w hich de b it b ala nce takes place. All Creditors Sub sidiary Ledgers or Accounts Payable Subsidiary Ledger Accounts are prepared separately to avoid detailed of information in one single creditors control ledger account. T he sum of all of the i ndividuals suppliers are summed up in one creditors control ledger account. Example: Suppose a company has purchased goods from 5 suppliers. The sum of closi ng b ala nces of eac h creditors su b ledgers give a fi nal deb it b ala nce. T he n in t hat case, Creditors Co ntrol Ledger Account s hows de b it b ala nce w h ic h is s how n in t he Balance Sheet with the accou nt’s name “Advances To Suppliers” as a Current Asset .                  

I nventory or Stock or Merc ha ndise are goods remain unsold at t he e nd of t he accou nting period w hile Office Supplies are co nsumab le items remai n on ha nd or existed in t he b usi ness for use during t he accou nting period. I nventory is related to goods purc hased b y the b usi ness for resale purposes w hile office supplies purchased b y the compa ny to use or consume in t he b usi ness and not for resale purposes.

Office Supplies or Office Supplies On Hand is eit h er purc h ased b y th e b usi ness w h ic h is available for use in t h e business or remained on h and in b usi ness at t h e end of t h e accounting period. Office Supplies Expense account is used or consumed in t he b usi ness for t he period while Cost of Sales or Cost of Goods Sold is the cost of goods or products a nd it is incurred to make Sales . Office supplies on h and is a Current Asset as it is used in t he b usi ness for t he pro b a b le b e nefits of t he b usi ness during t he curre nt accounting period w hile cost of sales is the direct cost i ncurred for t h ose goods purc hased b y the b usi ness for resale purposes. It is recorded in Income Statement or Trading Account in order to calculate Gross Profit or Gross Loss for t he accou nting period.

I n a b usi ness office, Office Supplies O n Hand / Office Supplies Unused are needed w hich are co nsumab le items such as pri nter, pencil, pen, ink port, paper, telep h ones, etc., Wit hout these supplies, a b usi ness can not b e fu nctional effectively. T he word “Supplies O n Ha nd” means t hat office supplies is availa b le for use i n t he b usi ness w he n t he b usi ness initially purc hased it or that it is still not used at t he e nd of t he accou nting period. W h en office supplies on h and is purc h ased, t h en it is existed or availab le for use i n t h e b usi ness and its b e nefit will b e get by t h e business in future. During t he accou nting period, all supplies are not consumed or used b ut remai ned to b e used i n t he next accounting period. T hese remai ning supplies are called closi n g supplies o n ha nd and t hose supplies which are used or co nsumed during t he period are called supplies expe nse b ecause the b usi n

Carried Dow n Bala nce, w hich is writte n as Bala nce c/d s hows either the De b it Bala nce or Credit Bala nce depending upon higher sides i.e., if the amou nts of de b it side is more t ha n credit side i n a Ledger Account , t he n it s hows de b it b ala nce and if t he amou nts of credit side is more tha n t he de b it side i n a ledger account, t he n it s hows credit b ala nce as deb it side needs more amount to b ecome equal to credit side. Bala nce Carried Down of Different Types of Accounts will b e co ntinued to be tra nsferred to t he next Step of Accounting Cycle unless t he the accou nting cycle completes. For example, Office Equipme nt is a Fixed Asset , w hich has normal deb it b ala nce as its deb it side is more tha n credit side. So, t h e b ala nce carried down or b ala nce c/d is written on credit side as s how n b elow:                                                                   A BC Company          

Promotional Expenses are t hose Expe nses w hich are i ncurred b y the compa nies to promote b usi ness’ products or services t hrough various marketi ng met hods or marketi ng tec h niques suc h as advertisements, b a nners, billboards, etc. Examples of promotion expenses are giving free products samples like free samples of furniture whe n lau nc hes new ones , offering one mont h su b scriptio n, offering free training for 3 days, offer free trial for 30 days, t h en to purch ase t h e program or software etc. T he jour nal entry to record promotional expenses is s how n b elow:                               Promotio nal Expenses a/c  XXX                                                                         Cas h a/c / Ba nk a/c   XXX                                                   (Promotio nal Expenses Paid for t he Period) T he promotio nal expense is a Temporary Account and it is recorded in Income Statement under Selling &a

W h at If In A Trial B alance, Sundry Debtors And Sundry Creditors B alances Are Shown On B oth Deb it A nd Credit Column, T h en What Will B e Its Effect In Balance S h eet? In order to know t he a nswer of t his questio n we must know t he followi ng important points ab out b oth Su ndry Deb tors / Accou nts Receivab le a nd Sundry Creditor / Accounts Payable . Sundry Deb tor or Accou nts Receivab le is a Curre nt Asset w hich have favora b le de b it b ala nce. However, there are some reaso ns due to w hich it has N egative Credit Balance suc h as receivi ng advance payments from customers, wrong information entered, etc. On t he other ha nd, Sundry Creditors have favora b le credit b ala nce, so it is a Current Liab ility . b ut it has N egative or Unfavorable Debit Balance due to some reasons suc h more amou nt paid to suppliers / vendors t ha n t he actual amou nt, wrong information related to purc hase order e ntered, etc. Accounting

Sub scription Received In Advance or Subscription In Arrears is t he amou nt of revenue received b y the compa ny in advance from t he customers / clients agai nst w hich still the goods or services are not delivered or re ndered for t he accou nting period w hile Subscription Paid In Advance or Prepaid Subscription is t he amou nt of expense paid in advance against w hich still the goods or services are not delivered or rendered at t he e nd of t he accou nting period. Sub scriptio n received in advance is a Current Liab ility as it shows the reve nue received in advance. So it is s h own on t h e Bala nce S h eet as a current liability on Liabilities & Equity side w hile Su b scriptio n Paid In Advance is a Current Asset as it s hows the expe nse paid in advance. It is also reported on b ala nce s heet b ut o n Assets side as a curre nt asset.

Su b scriptio n paid in advance is a Current Asset as it is s h ows t h at Expense w hich is paid i n advance to t he compa ny b ut still t he goods or services are not delivered or rendered at t h e end of t h e accounting period to t he compa ny w hich paid su b scriptio n in advance. T he adjusti ng entry to record in t he b ooks of Accou nts is s how n b elow:                     Su b scriptio n Paid In Advance a/c  XXX                                                                            Sub scriptio n Expense a/c  XXX                                                              (Sub scriptio n Paid In Advance)   Sub scriptio n paid in advance is s how n on Bala nce S heet as a Curre nt Asset on Assets side of b ala nce s heet. Sub scriptio n paid in advance is also called Prepaid Sub scriptio n.