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Mark ISP
Level 1

accounts with negative values

When an account that normally has a credit balance such as Current Liabilities, or Deposits Held has a negative balance ( - ) on the Chart of Accounts, does this mean that they currently have a Debit balance?

1 Comment 1
Level 3

accounts with negative values

The short answer is "yes"!


When viewing the chart of account you will see the account balances listed as positive numbers and negative numbers (-).  The positive numbers reflect how that account type normally carries a value (debit balances for assets and credit balances for liabilities).  If you see a negative (-) balance in one of the accounts it means it has the opposite of what the account type normally carries in value.  


A good example would be a fixed asset account.  If you purchase a vehicle the value of the vehicle on the chart of accounts would have a positive or debit balance.  Every year the vehicle is depreciated and there is another account "vehicle depreciation" listed as a fixed asset.  This account will carry a negative balance even though it is an asset as it is reducing the value of the corresponding asset, vehicle, and carries a credit balance.


The liability section of the balance sheet works the same way.  It is just that the positive account balances are credits and the negatives are debits.



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