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Jack L.
Jack L.
Aveley, WA
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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?

3 years ago

Responses

Hello

OK is this a question with 4 alternate answers?

AJ

Comments

Yes. Sorry. Should've clarified. It is a multiple choice question.

Hi Jack,

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.

so..

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...

AJ

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