Accounting Manager Interview Question:

Why some asset accounts have a credit balance?

Submitted by: Muhammad

Some asset accounts have a credit balance due to following reasons,

☛ 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 amount of checks written exceeded the positive amount in the Cash account
☛ Continuing to amortize or depreciate an asset after its balance has reached zero
Submitted by: Muhammad