Question

In the first month of operations, the total of the debit entries to the Cash account amounted to $3540 and the total of the credit entries to the Cash account amounted to $2120. The Cash account has a balance of ________.

Answer 1

$1,420

Step-by-step explanation:

Cash account is normally a debit balance (as an asset) and debit entries represent a receipt of cash (an increase) while credit entries represent an outflow (a reduction) of cash.

The cash balance is as such the net between the debit balances and the credit entries posted.

The Cash account has a balance of

= $3540 - $2120

= $1,420