Question

When calculating the cash account, which of the following must be subtracted

Answer 1

Profit (or Loss) = Total Income - Total Expenses

Step-by-step explanation:

Cash accounts deal with transactions that involves cash basis, not accrual basis. Thus there would majorly be cash inflows and cash outflows, which can be referred to as income and expenses respectively.

In calculating the cash account, subtract the sum of all cash outflow (expenses) from the sum of all cash inflow (income).

i.e Profit (or Loss) = Total Income - Total Expenses