Asked by Blake Archer on Jul 18, 2024
Verified
Which statement (s) concerning cash is
(are) true?
A) Cash will always have more debits than credits.
B) Cash will never have a credit balance.
C) Cash is increased by debiting.
D) All of these choices.
Debits
Entries on the left side of an account ledger, indicating an increase in assets or expenses or a decrease in liabilities, equity, and revenue.
Credits
Accounting entries that increase liabilities or equity or that decrease assets, representing the opposite of debits.
- Recognize the treatment of cash transactions in accounting.
Verified Answer
VR
Veronica RedwayJul 21, 2024
Final Answer :
C
Explanation :
Cash is an asset account, and like all asset accounts, it has a normal debit balance. Therefore, cash is increased by debiting and decreased by crediting. Option A is incorrect because cash can have equal debits and credits if there are no changes in the account balance. Option B is incorrect as cash can have a credit balance if there are overdrafts. Option D is incorrect as only option C is true.
Learning Objectives
- Recognize the treatment of cash transactions in accounting.