A credit balance in cash book indicates?
Correct answer: C. Bank overdraft
- A. Bank balance
- B. Cash at bank
- C. Bank overdraft
- D. Bank underdraft
Explanation
A credit balance in the bank column of the cash book means payments or withdrawals exceed the available bank balance. This represents a bank overdraft, not an underdraft.
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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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