A company has an $11,263 credit balance in the payable accounts. Given this information, which of the following is a TRUE statement?
A)It is NOT normal for payable accounts to have a credit balance.
B)Not enough information provided, since normal account balances are different for each company.
C)It is ALWAYS normal for payable accounts to have a credit balance.
D)Payable accounts shouldn't be this high, so this is not a normal balance.

Question

Quizplus · Accepted Answer

Accounts payable is a liability account, and it is normal for liability accounts to have a credit balance. This indicates the amount the company owes to its suppliers or creditors.

A Company Has an $11,263 Credit Balance in the Payable