If credit side of a bank account is greater than the debit side, it indicates which of the following?
Correct answer: A. Bank overdraft
- A. Bank overdraft
- B. Cash at bank
- C. Bank balance
- D. Current Asset
Explanation
When the credit side exceeds the debit side, withdrawals have exceeded available bank funds, producing a credit balance called a bank overdraft. Cash at bank normally has a debit balance.
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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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