Question - Why some asset accounts have a credit balance?
Answer -
Some asset accounts have a credit balance due to:
- Receiving and posting an amount that was higher than the recorded receivable.
- Expenses occurred faster than the agreed-upon prepayments.
- An error caused by posting an amount to a wrong account.
- The number of checks written exceeded the positive amount in the Cash account.
- Continuing to amortize or depreciate an asset after its balance has reached zero.