If I make an over payment to a creditor, how do a classify that? As debtor or an overpayment?
submitted by Annushka

Julius Orange

Because the payment is to a creditor, it is classified as an asset, specifically recorded as an 'overpayment' or a similar current asset account. The creditor doesn't necessarily become a debtor, because you'll likely be able to apply that overpayment to future credit you incur with them.

If you don't have other transactions to do with them in the future, the amount you overpaid could be returned as a refund.