Credit Balances In Accounts Receivable Are Classified As What?
Solution To The MCQ Question You May Also Be Studied About, “ Credit Balance In Debtors / Accounts Receivable Control Ledger Account ” The correct answer is (a) i.e., Current Liabilities (which is recorded on balance sheet under Current Liabilities Section on Liabilities & Equity Side), as the company received more than the amount due from customers due to overpayments by customers by mistake, defective goods returned by the customers after making payment, or due to some other reasons. So, the company is liable to pay to customers for the amount received in excess of due amount. Usually, Accounts Receivable or Sundry Debtors' normal balance is debit but it may be credit due to some reasons. In this case, it is a liability for the company to refund the extra amount received than the original invoice price. For example, if Mr. A, a customer, after making payment of $300 for goods sold to him by the company found that the goods are not according to the order specified, then...