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General Accounting Discussions: assets versus liabilities

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    • CommentAuthorMargie
    • CommentTimeMar 13th 2007
     
    Are refunds considered a liability or asset? I found two accounts going for "refund to customers" and tried to combine them. However, at the time one account was a libability and one was an asset. Of course, after I made the journal entry to combine them, I ended up with an incorrect figure because of the debit and credit issue. How do I get both amounts into the same category with the correct figure and which type should it be?

    Thank you.

    Margie
    • CommentAuthoraccountant
    • CommentTimeMar 28th 2007
     
    The question does not seem to be clear. can you please explain this clearly.
    Normally, if you are getting a refund, say for eg. tax paid, you would book it as other income if it is for a past period for which the books are already closed.

    If the refund is being given by you, then you would credit the debit the account which you would have credited when you had received the amount.

    Hope this helps!!

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