PRC-1 · Chapter 3 · Question 53 of 100
If the bank account in the general ledger shows a credit balance brought down (Balance b/d), what does this signify?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The business is currently operating with a bank overdraft.
Explanation
A credit balance on a bank account indicates that the business has withdrawn more money than it deposited. This represents a liability owed to the bank, known as a bank overdraft.
More Ledgers and Trial Balance MCQs
- Q55The Trade Receivables account has an opening debit balance of Rs. 46,652. During the period, sales were Rs. 245,000, cash received was Rs…
- Q56Which of the following ledgers typically contains the Owner's Capital account and the Drawings account?
- Q57In which specific ledger would the 'Return Inwards' (Sales Returns) account be permanently located?
- Q58A business extracts its trial balance, and the debit side is Rs. 5,000 higher than the credit side. Which of the following errors could…
- Q59Which of the following pairs of errors will NOT affect the agreement of a trial balance?