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.
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.
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.
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 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.