If the Cash account has a credit balance, which of the following statements is true? 1...
If the Cash account has a credit balance, which of the following statements is true?
| 1 |
An error has occurred and must be corrected before financial statements can be prepared. |
| 2 |
Debit postings exceed the credit postings for the accounting period. |
| 3 |
The account needs to be analyzed to determine the reason for the credit balance. |
| 4 |
This is the normal balance for cash. |
Homework Answers
Correct answer------------(1) An error has occurred and must be corrected before financial statements can be prepared.
.
The cash balance represents the cash in hand. Cash will be a credit balance only if the cash paid paid is more than cash available which is an impossible situation. We cannot pay cash more than what we have.
The bank balance can have credit balance because banks provide loan , so if payment from bank is more than available balance in bank the credit balance is basically term credit or overdraft given by bank.
Cash cant have a credit balance and if so there must be an error which required to be checked.
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If the Cash account has a credit balance, which of the following
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bconomiassumption monetary ni mion periodicity assumption 17. If total liabilities decreased by 4.000, then t e sex holders' equity must have decreased by 14.000 as must have decreased by $4.000 osobedien wets and sockholders' equity each increased by 12.000 sets must have increased by 54.000 18. If expenses are paid in casethen sets will increase b. liabilities will decrease wockholders equity will increase dass will decrease 19. The payment of a liability a decreases assets and stockholders' equity increases assets...
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