PRC-1 · Chapter 3 · Question 88 of 100
If a liability account like 'Bank Loan' has a 'Balance b/d' of Rs. 100,000 on the credit side at the start of the year, this mathematically means:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The business owes the bank Rs. 100,000.
Explanation
A credit balance brought down on a liability account represents the continuing obligation that the business currently owes to the external party (the bank).
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