Credit balance in ledger will be either:-a)A revenue or an assetb)An expense or an assetc)A revenue or a liabilityd)An expense or a liabilityCorrect answer is option 'C'. Can you explain this answer?

Question

Answer

In accounting, a credit balance is the ending amount found on the right side of a general ledger account or subsidiary ledger account. A credit balance is normal and expected for the following general ledger and subsidiary ledger accounts: Liability accounts.

Answer

The correct answer is C because liability and revenue shows credit balance as per the golden rule Dr.all expenses and losses , Cr.all revenues and incomes

Answer

The credit balance is said to be a revenue or a liability bcoz the ledger contains all the financial transactions of 3 types of a/c -personnal a/c , real a/c &nominal  a/c.. these 3 types  of accounts have principles to be followed for debit & credit for  journal & ledger entries.personnal a/c debit the receiver & credit the giver real a/ c  debit wt cms in & credit wt goes out nominal a/c debit all expenses & losses & credit all incomes & gains.So , from the above reasons / explanation, I can say that the given statement/ the option C is correct!

Answer

Increase in liability are cr decrease in liab are dr
Increase in income are cr Dec in income are dr

Answer

Yes option 'c' it's right answer. True a credit balance is the ending amount found on the right side of a general ledger account or subsidiary ledger account.

Answer

C

Answer

Credit balance in a ledger can be categorized as a revenue or a liability. Let's understand why this is the correct answer and explore the concept in detail:

Revenue:
- Revenue refers to the income generated by a business through its regular operations. It represents the inflow of economic benefits and is typically earned by providing goods or services to customers.
- When a business receives payment from its customers or clients, it records this as a credit entry in the revenue account. As a result, the revenue account will have a credit balance.
- The credit balance in the revenue account indicates the total revenue earned by the business during a specific period. It represents the amount that the business has earned but has not yet been realized as cash.

Liability:
- A liability represents an obligation or a debt that a business owes to its creditors. It arises from past transactions or events and requires the business to transfer economic benefits in the future.
- Sometimes, businesses receive payments in advance from their customers for goods or services that will be provided at a later date. These payments are recorded as credit entries in a liability account, such as unearned revenue or advance payments from customers.
- The credit balance in a liability account signifies the amount that the business owes to its customers or clients. It represents the liability that the business has incurred but has not yet fulfilled.

Therefore, a credit balance in a ledger can be classified as either a revenue or a liability, depending on the nature of the transaction. If the credit balance represents income earned by the business, it is categorized as revenue. On the other hand, if the credit balance represents an obligation or a debt owed by the business, it is classified as a liability.

In conclusion, the correct answer is option 'C' - a credit balance in a ledger can be either a revenue or a liability.

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