Question

In: Accounting

While reviewing a trial balance, you notice the following account balances. Which one is likely to...

While reviewing a trial balance, you notice the following account balances. Which one is likely to be an error? Account Receivable with a debit balance of $4,000 Allowance for Doubtful Accounts with a credit balance of $23,000 Accumulated Depreciation with a debit balance of $8,000 Inventory with a debit balance of $43,000 Account Payable with a credit balance of $6,600

Solutions

Expert Solution

A)

Account Receivable with a debit balance of $4,000 – Accounts receivables always have a debit balance as they are categorized under current assets

B)

Allowance for Doubtful Accounts with a credit balance of $23,000 – Allowance account is a provision account and will have a credit balance

C)

Accumulated Depreciation with a debit balance of $8,000 – Accumulated depreciation is a provision account and should have a credit balance. So, a debit balance is opposite of the normal balance for this account

D)

Inventory with a debit balance of $43,000 – Inventory will always have a debit balance as they are categorized under current assets

E)

Account Payable with a credit balance of $6,600 – Accounts payable will always have a credit balance as they are categorized under current liabilities

So, as per above discussion, option C is the correct option

ekkarill92 answered 2 years ago
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