The bank account in the general ledger has an unfavorable balance on 1 August 2023, R8 451.00. What is the correct balance for the bank account in the general ledger?
Understand the Problem
The question is asking about the correct journal entry (credit or debit) related to a bank account that has an unfavorable balance. The context involves understanding accounting principles related to general ledger entries.
Answer
Credit entry
The correct entry for an unfavorable bank account balance is a credit entry.
Answer for screen readers
The correct entry for an unfavorable bank account balance is a credit entry.
More Information
An unfavorable balance in accounting typically indicates that the account is in overdraft or has a deficit.
Tips
Confusing credit and debit terminology in accounting is common. Remember, in asset accounts, debits increase the balance, while credits decrease it.
Sources
- Solved question about unfavorable balance - studocu.com
- Favourable and unfavourable balances - desd.nwpg.gov.za
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