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It is possible for a negative cash balance to appear on the balance sheet if a business has issued checks for more funds than it has in its cash account.
I learned this in banking sector, and clears me all.
One issued a cheque will present in bank after 3 days, in against a cheque one received from another person will present in bank in 2 days,
For now, you books will show all as negative figure,
We allow such act only on behalf of good will in market,
I prefer to leave answers to Experts. Thanks for Your kind Invitation.
Agree with expert ansewrs above
A negative cash balance appears on the balance sheet when the cash account has a credit balance. The credit or negative balance in cash account is usually caused by organization writing checks for more than the amount in the cash account.
The experts help us out but none the less, mr. Fazlur's submissions sound great & satisfactory.
Thanx for the invitation
A negative cash balance appears on the balance sheet when the cash account in the general ledger has a credit balance. The credit or negative balance in the general ledger cash account is usually caused by a company or organization writing checks for more than the amount in the general ledger cash account. When preparing the balance sheet, the negative balance in the cash account should appear as a current liability(Checks Written in Excess of Cash Balance) instead of reporting the negative cash as an current asset. A negative cash balance in the general ledger (on the balance sheet) does not mean that the company's bank account is overdrawn. For example, if a company writes checks for $100,000 and mails them at the end of the day to suppliers in another state, those checks might not clear the bank account for four days. The general ledger account might show a negative $40,000 but the bank's checking account might be reporting a positive balance of $60,000. If the company deposits more than $40,000 tomorrow morning, the bank balance will not show an overdraft because the bank balance will be large enough to pay the $100,000 of checks when they clear the company's checking account in a few days.
Thanks for your invitaiton, I am leaving the answer to experts.
I agree with the answers Mr. Md. Fazlur Rahman
Condition taking guarantees
