Regan Company adheres to a policy of depositing all cash receipts in a bank account and making all payments by check. The cash account as of August 31 has a credit balance of $1,200, and there is no undeposited cash on hand.
(a) Assuming that no errors occurred during journalizing or posting, what caused this unusual balance?
(b) Is the $1,200 credit balance in the cash account an asset, a liability, stockholders’ equity, a revenue, or an expense?