Ext. Trial Balance - Bank Dr or Cr?
The other day during a practice paper for AP1 our tutor announced people were getting a question wrong. The question had account balances that needed to be put in a trial balance and then the balances had to be transferred to IS or SFP. The bank balance was a credit and several of us put it as a liability in the SFP and we were told that was wrong and it was an asset because it had a credit balance. I have always felt quite sound in my knowledge of debits and credits and exceeded in all my exams. Debit = money in, credit = money out, so a debit would mean you have money there which is an asset and a credit would mean the account is overdrawn which is a liability. We didn't end up getting the answers for the questions so who was right? I have my AP1 exam next week and I'm really panicking now that I have misunderstood loads of stuff!