A cash deposit made by business appears on the bank statement as _______ balance?
Correct answer: C. Credit
- A. Debit
- B. Expenses
- C. Credit
- D. Liability
Explanation
From the bank’s perspective, a deposit increases the amount it owes to the customer, so it is recorded as a credit in the bank statement. The same deposit is a debit in the business’s cash book.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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