Why Would a Cash Account Have a Credit Balance?

by Jennifer VanBaren; Updated September 26, 2017
Cash is an accounting account that normally contains a debit balance.

Cash is an account used in accounting that has a normal debit balance. Accounting is done using a double-entry method using debits and credits. The cash account represents how much cash the company has on hand or in its bank accounts.

Overdrawn

When a company writes checks out totaling more than the amount of cash available, the cash account would have a credit balance.

Deposits Not Recorded

The company’s cash account might reflect a credit balance if a deposit made has not been recorded on the check register.

Checks Mailed

Sometimes a company mails checks out in the afternoon which causes the cash account to have a credit balance. The company then makes and records a deposit the following day.

Electronic Withdrawals

Often times, electronic withdrawals happen that the company did not expect. These withdrawals would cause the cash account to have a credit balance.

Monthly Fees

Monthly fees occur with bank accounts and can cause the cash account to have a credit balance if there is not enough money in the account to cover the fees.

About the Author

Jennifer VanBaren started her professional online writing career in 2010. She taught college-level accounting, math and business classes for five years. Her writing highlights include publishing articles about music, business, gardening and home organization. She holds a Bachelor of Science in accounting and finance from St. Joseph's College in Rensselaer, Ind.

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