In Pepper Consulting's first month, total debits to the cash account were $900 and total credits were $600. What is the ending cash balance?

In Pepper Consulting's first month, total debits to the cash account were $900 and total credits were $600. What is the ending cash balance?

• A. $900 debit balance
• B. $600 credit balance
• C. $300 debit balance
• D. $300 credit balance

Answer: (C)

Cash is an asset, and assets increase with debits and decrease with credits. The ending cash balance equals beginning cash plus total debits minus total credits. Since this is the first month, the beginning cash is zero, so the ending cash is 900 minus 600, which equals 300. Because cash is an asset, this ending balance appears as a debit balance. Therefore, the ending cash balance is a $300 debit balance.

Cash is an asset, and assets increase with debits and decrease with credits. The ending cash balance equals beginning cash plus total debits minus total credits. Since this is the first month, the beginning cash is zero, so the ending cash is 900 minus 600, which equals 300. Because cash is an asset, this ending balance appears as a debit balance. Therefore, the ending cash balance is a $300 debit balance.