Refer to sheet A4Q7-9

Create a trial balance from the journal entries provided. What is the balance in Cash?

Question

Refer to sheet A4Q7-9

Create a trial balance from the journal entries provided. What is the balance in Cash?

BlackTom AI · Accepted Answer

The question asks to create a trial balance from journal entries and asks for the balance in Cash. We should restate the given options to ensure clarity before analyzing them.

Option 1: $68,628 Debit
Option 2: $81,972 Debit
Option 3: $68,628 Credit
Option 4: $81,972 Credit

Analysis of each option:
- Option 1 ($68,628 Debit): In most accounting contexts, Cash is an asset and carries a normal debit balance. A debit balance for Cash is consistent with it being an asset. If the trial balance shows Cash as a debit of $68,628, that would be plausible, assuming the journal entries posted to Cash increased by this amount and there are no offsetting credits that would reverse this to a credit. Consider whether any cash-related transactions (receipts, disbursements, bank charges, etc.) could have reduced Cash; if so, the number might differ. This option matches the typical treatment of Cash as an asset with a debit balance.
- Option 2 ($81,972 Debit): Like Option 1, this presents Cash as a debit balance, which is consistent with Cash as an asset. The difference in amount from Option 1 would come from the actual journal entries posted to Cash. If the trial balance tallies to this amount, it could be correct, provided the underlying entries total to this figure for Cash.
- Option 3 ($68,628 Credit): A credit balance in Cash would indicate a negative cash position or misclassification. In standard double-entry accounting, Cash is an asset with a normal debit balance; a credit balance would imply an error in posting or a rare scenario like overdrawn cash, which is typically shown as a liability (Overdraft) rather than Cash credit. Unless there is evidence of an overdraft or a specific adjustment that reclassifies Cash, this option is unlikely to be correct.
- Option 4 ($81,972 Credit): Similar to Option 3, a credit balance on Cash is atypical for a straightforward trial balance of cash. This would generally signal misposting, an overdraft treated as Cash, or an accounting error. Without such an unusual circumstance explained in the journal entries, this option should be viewed as incorrect.

Additional considerations:
- If the task explicitly says to prepare a trial balance from journal entries, confirm that every debit entry to Cash has a corresponding credit entry somewhere else (e.g., to Revenue, Accounts Receivable, or Bank), and that the final cash balance reflects all receipts minus disbursements. The exact amount would depend on the sum of those Transactions.
- Since the question emphasizes Cash’s balance, it’s important to verify whether Cash indeed ended with a net positive balance (debit) after all postings. In typical practice, only debit balances for Cash are reported in the trial balance unless an overdraft mechanism is in place.

Putting it together:
- Option 1 and Option 2 present Cash as a debit balance, which aligns with standard treatment for Cash as an asset. The correct choice between these two would depend on the actual sums of cash receipts and disbursements in the journal entries.
- Option 3 and Option 4 present Cash as a credit balance, which would generally indicate an abnormal or erroneous situation unless supported by additional context such as an overdraft or misclassification in the entries.

In summary, the logically expected forms are the debit options (1 or 2) rather than the credit options (3 or 4). The exact correct choice cannot be determined here without the underlying journal totals for Cash, but the debit options are the ones that conform to standard accounting for Cash as an asset.

BUSI_V 335 972 2025SS Assignment 4 - LOOKUPs, Power Query and Databases

Refer to sheet A4Q7-9 Create a trial balance from the journal entries provided. What is the balance in Cash?

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