why is cash balanced only in the debit side of ledger?
Ok Anushka, let us evaluate the given scenario from upside down perspective. We know that the debit side of Cash Book shows the cash receipts (that is those transactions that lead to increase in cash balance with the business) and the credit side of Cash Book shows the cash payments (that is those transactions that lead to decrease in cash balance with the business). In other words, it implies that the debit side shows the cash balance that you have and the credit side shows how much you have spent.
Now, let us get back to the question. I believe you know the meaning of the debit balance of Cash Book. Yes, it means that the debit side exceeds the credit side of Cash Book. In other words, 'what you have' is more than 'what you have spent'. Now, think of a situation, where you have spent more than what you have. Can that be possible?? Well, the answer is no, this is because until and unless you borrow or you have past savings you cannot spend more than what you actually have.
Thus, the answer to your question is simply that you can't spend more than what you have, hence, the closing balance of Cash Book will always have a debit balance.
Keep posting!!
Now, let us get back to the question. I believe you know the meaning of the debit balance of Cash Book. Yes, it means that the debit side exceeds the credit side of Cash Book. In other words, 'what you have' is more than 'what you have spent'. Now, think of a situation, where you have spent more than what you have. Can that be possible?? Well, the answer is no, this is because until and unless you borrow or you have past savings you cannot spend more than what you actually have.
Thus, the answer to your question is simply that you can't spend more than what you have, hence, the closing balance of Cash Book will always have a debit balance.
Keep posting!!