Credit and Debit balances on SAGE

lozza10

Hello I'm really confusing myself with credit and debit balances on SAGE for customers and suppliers and was wondering if anyone can help me please and confirm if the below is correct?

Customer Account
DEBIT balance = THEY OWE US
CREDIT balance = WE OWE THEM (CUSTOMER OVERPAID, PAID TWICE, DISCOUNT ON GOODS BEING APPLIED AFTER INVOICE IS SENT TO CUSTOMER


Suppliers Account
DEBIT balance = THEY OWE US - WE MAY HAVE MADE A PAYMENT ON ACCOUNT
CREDIT balance = WE OWE THEM, may have overpaid or paid twice or a missing invoice

WarrenJAllen

That sounds correct.

If you remember that Assets are Debits, and Liabilities are Credits, it should help keep it straight in your mind.

If you’re owed it, it’s an asset. If you owe it, it’s a liability.

RAKTHER

Hi lozza10,
I think that's correct how you did, you should add discount received on Supplier Account debit balances. Therefore, On Supplier Account credit balances should be missing invoice or overstated invoice or record twice invoice or recorded invoices not the paid (payment) invoices.

Customer Account:
Debit balances increases assets
Credit balances decreases assets

Supplier Account:
Debit balances decreases liability
Credit balances increases liability

RAKTHER
Training Coordinator, Osborne Training.