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Simple English definitions for legal terms
credit balance
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A quick definition of credit balance:
Term: Credit Balance
Definition: A credit balance is when there is more money added to an account than taken out. This means that the total amount of money that has been credited to the account is greater than the total amount of money that has been debited from the account.
A more thorough explanation:
Definition: A credit balance is the status of an account when the total amount of credit entries is greater than the total amount of debit entries.
Example: Let's say you have a credit card account with a balance of $500. You make a payment of $300, which is a debit entry, and then you receive a refund of $100, which is a credit entry. The total amount of credit entries is now $100, and the total amount of debit entries is $300. This means that your account has a credit balance of $100.
Another example: You have a savings account with a balance of $1,000. You deposit $200, which is a credit entry, and then you withdraw $100, which is a debit entry. The total amount of credit entries is now $200, and the total amount of debit entries is $100. This means that your account has a credit balance of $100.
The examples illustrate the definition of credit balance by showing how it is determined by comparing the total amount of credit entries to the total amount of debit entries in an account. When the total amount of credit entries is greater than the total amount of debit entries, the account has a credit balance.