negative assets

[A***@nyu.edu]

What does negative assets on a balance sheet mean? It looks like it is
coming from negative amount of cash in the bank....but are you suppose
to book it as a negative amount of cash in the bank or just zero?

Thank you in advance!
Andrianna

[TKnTexas]

There are two things that quickly come to mind, in a large sense, that
could make the assets be negative. (I am sure there are lots of
reasons.) If you overdraft the cash account it could be negative.
Deposits not booked? Check run posted twice?

Or it could be that depreciation entries were booked incorrectly, or
the amortization of prepaid expenses were booked incorrectly. Whatever
the case, BIG FLAGS should go off if there is a negative asset balance.

Post by A***@nyu.edu
What does negative assets on a balance sheet mean? It looks like it is
coming from negative amount of cash in the bank....but are you suppose
to book it as a negative amount of cash in the bank or just zero?
Thank you in advance!
Andrianna

[jerry]

Post by A***@nyu.edu
What does negative assets on a balance sheet mean? It looks like it is
coming from negative amount of cash in the bank....but are you suppose
to book it as a negative amount of cash in the bank or just zero?
Thank you in advance!
Andrianna

I don't know about your bank, but mine converts a negative balance into a
personal loan. If that is the case you have a current liability rather
than a negative asset.

BTW, if this is a class assignment rather than real life the above is
probably not an acceptable answer.

HTH
Jerry

[s***@gmail.com]

Is this got something to do with some cheques deposited and issued but
not entered in bank or ur bank book ... wat i mean is ... has the Bank
reconciliation done?

Post by jerry

Post by A***@nyu.edu
What does negative assets on a balance sheet mean? It looks like it is
coming from negative amount of cash in the bank....but are you suppose
to book it as a negative amount of cash in the bank or just zero?
Thank you in advance!
Andrianna

I don't know about your bank, but mine converts a negative balance into a
personal loan. If that is the case you have a current liability rather
than a negative asset.
BTW, if this is a class assignment rather than real life the above is
probably not an acceptable answer.
HTH
Jerry

[nilsson]

A negative asset is a contradiction.
If it is not an asset, then it is a liability.
A bank account that is overdrawn is a liability, you owe money.
Some software may not have the flexibililty to reclassify an overdrawn
bank account from an asset to a liability and therefore your balance
sheet would show a negative asset (assuming you have no other assets)
when you print the balance sheet report.

For internal reporting showing a negative asset is ok, but for external
use it is not. If the bank account is usually overdrawn (negative
value) then reclassify it as a liability account.

Post by A***@nyu.edu
What does negative assets on a balance sheet mean? It looks like it is
coming from negative amount of cash in the bank....but are you suppose
to book it as a negative amount of cash in the bank or just zero?
Thank you in advance!
Andrianna