Debit Balance In Creditors Control Account
The normal or usual balance of Creditors Control Ledger Account or Accounts Payable Control Ledger Account is Credit. However, there are some reasons, such as overpayments to suppliers, creditors or vendors, wrong amounts entered, etc., due to which debit balance takes place.
All Creditors Subsidiary Ledgers or Accounts Payable Subsidiary Ledger Accounts are prepared separately to avoid detailed of information in one single creditors control ledger account. The sum of all of the individuals suppliers are summed up in one creditors control ledger account.
Example: Suppose a company has purchased goods from 5 suppliers. The sum of closing balances of each creditors subledgers give a final debit balance. Then in that case, Creditors Control Ledger Account shows debit balance which is shown in the Balance Sheet with the account’s name “Advances To Suppliers” as a Current Asset.
Rs.
From Supplier - A’s Ledger (Credit Balance) 4000
From Supplier - B’s Ledger (Debit Balance) (3000)
From Supplier - C’s Ledger (Credit Balance) 2000
From Supplier - D’s Ledger (Debit valance) (2500)
From Supplier - E’s Ledger (Debit Balance) (1800)
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Total In Creditors Control Ledger Account (Debit balance) (1300)
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The creditors control ledger account closing balance of Rs. 1300 is debit which is transferred to balance sheet on Asset side as a “Advances To Suppliers” which is a Current Asset.
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