The Cash Account Has a Credit Balance

question 213

Multiple Choice

The Cash account has a credit balance. Which statement is true?

• A) This is the normal balance for cash.
• B) An error has occurred and must be corrected before financial statements can be prepared.
• C) The account needs to be analyzed to determine the reason for the credit balance.
• D) Debit postings exceed the credit postings for the accounting period.

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Definitions:

Von Restorff Effect

A psychological principle that items which stand out are more likely to be remembered than other items.

Episodic Memory

The memory of autobiographical events that can be explicitly stated, including times, places, and associated emotions.

State-dependent Memory

The phenomenon whereby information learned in a particular state of mind is more easily recalled when in the same state.

Episodic Memory

The subtype of long-term memory that involves the recollection of specific events, situations, and experiences.