In the first month of operations, the total of the debit entries to the cash account amounted to $1,200 and the total of the credit entries to the cash account amounted to $800. The cash account has a(n)
A) $800 credit balance.
B) $1,200 debit balance.
C) $400 debit balance.
D) $400 credit balance.

Question

Quizplus · Accepted Answer

The cash account has a debit balance of $1,200 - $800 = $400. This means that the company has spent more than it has received in cash transactions during the first month of operations. Therefore, the correct answer is C) $400 debit balance.

In the First Month of Operations, the Total of the Debit