Accountancy, asked by juliya5909, 1 year ago

Why is a negative cash balance reported as a liability?

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Answered by Rahidayoub
0
The following will illustrate why anegative cash balance is reported as a liability instead of being reported as anegative asset amount. Company X writes checks for more than its bankbalance and sends them to its vendors. ... The payee will in turn reinstate the liability amount owed to it by Company X.
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