Frank Kane company adheres to a policy of depositing all cash receipts in a bank account and making all payments by check. The accounts as of July 31 has a credit balance of K225 and there is no undeposited cash on hand. a) Assuming that there were no errors in journalizing or posting, what is the explanation of this unusual balance? b) Is the K225 credit balance in the cash account an asset, a liability, capital, a revenue or an expense?
Frank Kane company adheres to a policy of depositing all cash receipts in a bank account and making all payments by check. The accounts as of July 31 has a credit balance of K225 and there is no undeposited cash on hand. a) Assuming that there were no errors in journalizing or posting, what is the explanation of this unusual balance? b) Is the K225 credit balance in the cash account an asset, a liability, capital, a revenue or an expense?
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter5: Internal Control And Cash
Section: Chapter Questions
Problem 2SEQ
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Frank Kane company adheres to a policy of depositing all cash receipts in a bank account and making all payments by check. The accounts as of July 31 has a credit balance of K225 and there is no undeposited cash on hand.
a) Assuming that there were no errors in journalizing or posting, what is the explanation of this unusual balance?
b) Is the K225 credit balance in the cash account an asset, a liability, capital, a revenue or an expense?
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