Credit balance on debtor account in statutory accounts

Hi

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

or

2) current assets zero, current liabiltiy £40k  i.e the net balance of all debtors is a liability

or

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.

 

thanks

 

 

Comments
There are 4 comments. Login or register to view them.

Option 1

GW |

Agree

B Roberts |

Always

Richard Willis |
Richard Willis's picture

super!

hairyfingers |