Credit balance
In one sentenceWhat remains in an account when the total of its credit side exceeds the total of its debit side; it is the normal balance of liabilities, equity and revenue.
Simply put
A supplier's account increases on the credit side with every credit purchase invoice, and decreases on the debit side with every payment. What remains is a credit balance, meaning an amount you still owe.
If a customer shows a credit balance, it usually means they paid more than their invoices or paid in advance, so in that case the amount is owed to them, not by them.
Worked example
A furniture factory buys wood on credit from a single supplier.
Credit purchase invoices (credit side)50,000 SAR
Payments to the supplier (debit side)35,000 SAR
Credit balance owed to the supplier: 50,000 − 35,00015,000 SAR
Don't confuse it with
CreditCredit is a side of the entry, while a credit balance is what remains after comparing the two sides.