Why is it that accounts receivable can never have a credit balance? Also, why is it that accounts payable can never have a debit balance?
Assets and Liabilities:
Assets is the first section in the Balance Sheet. It can be classified into two:1. Current Assets and 2.Non current Assets. Examples of Assets are Cash, Prepaid Rent, Supplies, Inventories and Building. While Liabilities is the second section in the Balance Sheet, it is the payables of the company to suppliers, employees and customers. Examples of Liabilities are Accounts Payable and Notes Payable.
Answer and Explanation:
Accounts Receivable is always have a normal debit balance because this is part of Assets and all asset accounts has a final debit balance. While Accounts Payable should have a credit balance because it is part of the Liabilities account and all liabilities account has normal credit balance.
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Learn more about this topic:
from Accounting 101: Financial AccountingChapter 7 / Lesson 1