Negative balance sheet

can balance sheet be negative (both assets and liability are negative amounts).


  • sajjad
    sajjad Registered Posts: 4
    Hi, thank you for comment. I understand Assets can not be negative, but in my case i am using QuickBooks Pro accounting software and we have overdraft now since the system does not automatically change the negative bank account as short term liability therefore the assets are being negative and also the liability and equity is negative. So i am just confused whether is that ok

  • CeeJaySix
    CeeJaySix Registered Posts: 645
    Where you put the overdraft will no impact on equity (which can be negative - though in that case you should be looking at whether the company is solvent and/or a going concern).

    It should be included in current liabilities for stat accounts. For management accounts, it depends on the users preference in my experience.
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