A company has a forty million dollar credit balance in the cash account.Given this information,which of the following is a TRUE statement?
A)This is NOT a normal account balance-companies don't normally have this much cash on hand.
B)It is NOT normal for the cash account to have a credit balance.
C)Not enough information provided,since normal account balances are different for each company.
D)It is ALWAYS normal for the cash account to have a credit balance.

Question

Quizplus · Accepted Answer

It is not normal for the cash account to have a credit balance. Typically, cash accounts have debit balances. A credit balance in the cash account could indicate that the company has received more cash than it has paid out, but it is not a normal situation.

A Company Has a Forty Million Dollar Credit Balance in the Cash