The end of period spreadsheet is useful in preparing an Adjusted Trial Balance from which the three Financial Statements can be prepared. Please indicate the results in the adjusted Trial Balance under the following circumstances.
a. An account has a debit balance. The adjustment requires a credit to that account. The debit amount is higher than the credit amount. Is the result in the Adjusted Trial Balance a debit or credit?
b. An account has a debit balance. The adjustment requires a credit to that account. The credit amount is higher than the debit amount. Is the result in the Adjusted Trial Balance a debit or credit?
c. An account has a credit balance. The adjustment requires a credit to that account. Is the result in the Adjusted Trial Balance a debit or credit?
d. An account has a credit balance. The adjustment requires a debit to the account. The debit amount is higher. Is the result in the Adjusted Trial Balance a debit or credit?
Please let us know why Accounts Receivable can never have a credit balance. Please let us know why Accounts Payable can never have a debit balance.