Question

Cash has a normal debit balance. What does this mean in accounting? Be specific and provide as many details about this as you can. Use examples, and show that you know the importance of this concept!

Answer 1

Ans: Yes Cash has a normal debit Balance ; it indicates a positive Amount of cash.

In accounting there are two main things debit and credit: Debit the receiver, credit the giver; like this there are certain accounts which nature is to have a debit balance and certain accounts whose nature is to have a credit Balance.

It is very important in accounting that there should be debit Balance as it will represent that one should have more and more cash and will able to repay the expense from it. If it has credit Balance means negative balance, then it will represent that one cant use it to pay the expense or cash sale is less and cash deposited is more then a situation arise where cash balance is negative.

Cash is credited because cash is an asset account that decreased because cash was used to pay the bill.