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18 December, 10:29

In the first month of operations, the total of the debit entries to the Cash account amounted to $5600 and the total of the credit entries to the Cash account amounted to $3200. The Cash account has a

a. $2400 debit balance.

b. $5600 debit balance.

c. $3200 credit balance.

d. $8800 credit balance

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Answers (1)
  1. 18 December, 10:39
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    a. $2400 debit balance.

    Explanation:

    Cash is an asset (a resources owned/controlled by an entity as a result of a past event, for which future benefits will be enjoyed by the company). As such, like other assets, cash normally has a debit balance.

    The debits to cash represents the inflow of cash while the credit entries represents the outflows from the cash account.

    Account balance = $5600 - $3200

    = $2400

    The debits are more than the credit hence net balance is a debit.
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