Home › Forums › ACCA Forums › ACCA Financial Accounting FA Forums (FIA FFA Forums) › Double entry
A debit balance of $3,000 brought down on A Co’s account in B Co’s books
means that: –
A. A Co is owed $3,000 by B Co
B. B Co has sold $3,000 of goods to A Co
C. B Co is owed $3,000 by A Co
D. A Co has sold $3,000 of goods to B Co
l consider that the correct answer is A
Because if debit balance of A co is 3000$
In that case,B co owes 3000$ to A (as receivable)
My answer and explanation are correct???
The answer is C. The account is in B’s books therefore view the account from B’s perspective. If it’s a debit balance, it’s an asset rather than a liability. Therefore, B has $3,000 receivable from A.
You must be logged in to reply to this topic.