Does a credit balance have a minus sign in front? - Answers

The credit balance is a positive real number and as such it should not have a minus sign in front. Accounting: If this is about an asset, then this is an amount you owe (you do not have and you are liable to) otherwise if this is for a liability, then this is an amount others owe to you. Example: a credit balance in a tellers (cashier) account is not having a minus in front of it (since it is a positive number) but it means that the cashier is owing money to the till, since the cashier's account is an asset. If you want to reverse a credit balance then you CREDIT again the same amount with a minus in front (you shall NOT debit the same amount, as this is another transaction and not a reversal). Example: Account 1 Db______Cr ..............100 ................20 ..............270 ................10 ---------------- ..............400 <-- This is a credit balance (it shall be unsigned). Reverse transaction No 3 from Account 1 which concerns a loan (just an example) Account 1_____________Loans Db.......Cr_____________Db......Cr ........-270 reversal .......... 270 Now, this is the image of the same account Account 1 Db_______Cr ................100 ..................20 ................270 ..................10 ...............-270 ------------------ ................130 <-- This is the new credit balance (also unsigned). So. A credit balance never has a minus in front. A general ledger account usually can have reversals which are negative amounts on the credit (or debit) side, but this is not called 'credit balance' A balance can sometimes drop below zero, in which case (a) it will have a minus in front and (b) it will not be a 'credit' balance of course, but rather a debit one. Hope this helps. PS dots (....) and underlines (____) only added for visibility/readability purposes they are not contributing to the answer - Thank you.