'Loan Receivable' T Account
RecovR_Massage
Registered Posts: 7
Hi Everyone,
Will the 'Loan receivable' T Account have a DR or CR balance transferred to the trial balance?
I was thinking that it should be transferred to the trial balance as a CR because it is a liability but on the 'AAT L3 ACPR Sample Test 1', they say it is a DR.
Please could anyone help?
Thank you in advance!
Will the 'Loan receivable' T Account have a DR or CR balance transferred to the trial balance?
I was thinking that it should be transferred to the trial balance as a CR because it is a liability but on the 'AAT L3 ACPR Sample Test 1', they say it is a DR.
Please could anyone help?
Thank you in advance!
0
Comments
-
Hi,
As it is a 'receivable' it will usually tend to mean that it is an asset as you are receiving it therefore it will have a debit balance. I.e. you have lent money to someone.
The opposite of Loan receivable is Loan payable which is a liability which will have a credit balance; you have a taken out a loan and are expected to pay back the principle amount including any interest associated with the loan.
Hope this helps.0 -
Thanks Zoynal98,
I interpreted it wrong. I thought 'Loan Receivable' meant that I was going to 'receive a loan'.
Thank you for clearing it up!0 -
Anytime!0
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