The transaction that could not result in a credit balance in a debtor's account is:
sale of goods on credit that will be paid for in the next accounting period
receipt of a deposit for work ordered
return of faulty goods by a customer after payment had been made
payment by a customer after the debt had been written off as irrecoverable
I'm having trouble understanding this question. Could anyone please explain?
Hi sorry for the delay in getting back to you.
I hate double negative questions.
so what is the question asking?
So a debtors account? That is the debtors ledger showing you what they woe you. This is an asset account and dhence is a debit balance when someone owes you money. Dr Debtors Cr Sales.
1. Sale of good on credit - Dr Debtors Cr Sales hence a debit balance
2. Receipt of a deposit Dr Cash Cr Debtors - OK so this is a credit balance
3. Return of Fauly Goods after payment has been made. Dr Stock CR Debtors hence Credit Balance
4. Payment DR Bank Cr Debtors - Credit Balance
Hence the answer is 1...