Favorable balance of bank statement implies that
Correct answer: C. Credit balance
- A. Bank overdraft
- B. Debit balance
- C. Credit balance
- D. Adjusted balance
Explanation
A favorable bank-statement balance is a credit balance from the bank's perspective, because the bank owes that amount to the account holder. A debit balance generally indicates an overdraft.
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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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Accounting is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
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