Question

In the first month of operations, the total of the debit entries to the cash account amounted to $900 and the total of the credit entries to the cash account amounted to $600. The cash account has a(n)

Answer 1

Answer:

$300 debit balance

Explanation:

In business debit entries mean that the money is being added to the account, while credit entries means that the money is owed and is therefore being deducted from the account. Therefore, in this scenario the cash account has a $300 debit balance. This is because the credit entries are being subtracted from the debit entries (assuming that the account had a $0 initial balance). If we do the math we are left with $300 of debit.

$900 - $600 = $300