ACCA Applied Knowledge · Financial Accounting · Trial balance
At 31 December, Kestrel Co has these balances: Receivables $48,000; Allowance for receivables $2,500; Payables $31,000; Bank overdraft $6,200; Revenue $410,000; Purchases $215,000. Which one of the following lists shows only debit balances?
Receivables and purchases are the only two debit balances listed. The allowance for receivables, bank overdraft, payables and revenue all carry credit balances, so any list including them is not all debits. Therefore the correct choice is receivables and purchases only.
- AReceivables, Allowance for receivables, Purchases
- BReceivables, PurchasesCorrect
- CPayables, Bank overdraft, Revenue
- DReceivables, Bank overdraft, Purchases
Explanation
Receivables and purchases are debit balances. The allowance for receivables is a credit balance, as it reduces receivables. The overdraft, payables and revenue are credit balances, so only option 2 lists debits alone.
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