The correct accounting for accounts receivable accounts with credit balances, provided they are significant, would be:
A) written off.
B) moved to the debit side.
C) reclassified as accounts payable.
D) corrected by making adjusting entries.

Question

Quizplus · Accepted Answer

Accounts receivable with credit balances, if significant, should be reclassified as accounts payable because they represent amounts owed to customers, not amounts owed by customers.

The Correct Accounting for Accounts Receivable Accounts with Credit Balances