PRC-1 · Chapter 9 · Question 37 of 100
Bank interest charged on an overdraft is recorded in the cash book by:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Crediting the cash book.
Explanation
Interest charged on an overdraft is an expense that increases the overdraft (removes funds from the account). Thus, it must be credited in the cash book.
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