2.3 - T-Account Balances

Question 1

Exceptional Balances

Answer 1

1. You overpay A/P
2. A customer who paid cash, returns an unsatisfactory purchase
3. You return goods to a supplier, where you have no previous account balance
4. You overdraw (overdraft) your cash (bank account)

Question 2

“On account”

(purchase,sale,payment,receipt)

Answer 2

1. A PURCHASE on account isn’t paid for immediately
2. A SALE on account is when money isn’t received immediately
3. A PAYMENT on account is money paid to a creditor to reduce the amount we owe them
4. A RECEIPT on account is money received from a debtor to reduce the amount they owe to us