Question

a business has $5000 in cash, but then it pays $500 cash to make a purchase. after the transaction is posted, what is the balance in the Cash T-account a. $500 credit balanceb. $500 debit balancec.$4500 credit balanced. $4500 debit balance

Answer 1

The initial amount of cash, P=$5000.

The amount paid for purchase, C=$500.

The balance amount after paying for a purchase is,

`\begin{gathered} B=P-C \\ =5000-500 \\ =4500 \end{gathered}`

Therefore, the credit balance is $4500.

Hence, option c is correct.