My brain has gone home for christmas and I can't decide how to treat this simple scenario:
A company has 4 customers. 3 of the customers debtor balances total £60k. the 4th account has a credit balance of £100k. this is because this customer pays cash up front and as work is completed it is offset against the cash recieved upfront.
In the statutory accounts do I show this as
1) current assets 60k, current liability £100k i.e the credit balance is stripped out and shown as a liability
2) current assets zero, current liabiltiy £40k i.e the net balance of all debtors is a liability
3) current assets as a credit of £40k, current liability zero i.e net balance of debtors is still shown is CA alebit a credit balance
If it's option1 or 2 then in the accounts notes for current liabilities would I group the credit debtor balances in with normal trade creditors or would it be separately identified as a debtor with a credit balance.