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Why would a balance sheet list current liabilities as negative amounts?

Author:
Harold Averkamp, CPA, MBA

Reasons for Negative Current Liabilities on a Balance Sheet

Some older accounting software used minus signs or parentheses to indicate credit balances, while positive numbers indicated debit balances. The accounting software usually had an option to print the liability account balances on the balance sheet without the negative signs.

If only one liability account has a negative sign, it is likely that the liability account has a debit balance instead of the normal credit balance. This would be the case if a company remitted more than the amount needed.

During the first few days of the accounting period in which reversing entries are recorded to reverse the accrual adjusting entries for expenses and liabilities of the previous period, the current liability accounts will show debit balances. However, that is a temporary situation until the actual bills are processed.

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About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

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