I would like to know that when your cash or bank account is showing a negative figure isnt it suppose to be posed as a current liability in the SOFP(Statement of Financial Position)
This question has nothing to do with Manager itself, but with accounting practices in a particular location. A negative balance in an asset account is financially equivalent to a liability. Since cash accounts cannot have negative balances by definition and bank accounts have negative balances only in undesirable situations (and temporarily), Manager does not move them to the Liabilities group when their balances enter negative territory.
Ok, thank you very much.
I did not mention this, but if you want, you can move cash and bank accounts to the Liabilities group if they go negative.
Can you tell me how this is done. Should i just going into the account where it says Assets and change it to liability. So once the accounts are back to positive i would then have to change it back.
Go to Settings > Chart of Accounts and edit Cash at bank or Cash on hand. Change the group from Assets to Liabilities.
Note: you are dealing with control accounts here, so every bank account or every cash account (if you have more than one) will move, not just the one that might be negative.
Yes, you would have to edit the chart of accounts again when the accounts are back to positive. So there isn’t much benefit to doing this unless you temporarily need a balance sheet that includes negative bank or cash balances under liabilities.
Ok nice. Thank you very much for that valuable information.