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If the ending balance in the cash sheet account is a debit, it indicates that cash shortages have exceeded cash overages.

a. True
b. False

1 Answer

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Final answer:

The claim that a debit balance in the cash sheet account indicates cash shortages have exceeded cash overages is false. A debit balance merely represents the total cash on hand.

Step-by-step explanation:

The statement in the question about the ending balance in the cash sheet being a debit and indicating cash shortages exceeding cash overages is false. In accounting, a debit balance in the cash account reflects the amount of cash on hand, which can be the result of both cash inflows and outflows, including overages and shortages. However, a debit balance does not inherently mean that shortages have exceeded overages; it simply represents the total available cash.

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