A company has a $4568 debit balance in its cash account. Given this information, which of the following is a TRUE statement?
A)It is not normal for a business to have this much cash, therefore this is NOT a normal account balance.
B)It is NOT ever normal for the cash account to have a debit balance.
C)Normal account balances differ from company to company; therefore it is impossible to evaluate the given statement without more information.
D)It is ALWAYS normal for the cash account to have a debit balance.

Question

Quizplus · Accepted Answer

It is not uncommon for the cash account to have a debit balance. This simply means that the company has more cash going out than coming in at a given period of time. However, this does not necessarily mean that the company is in a bad financial position.

A Company Has a $4568 Debit Balance in Its Cash