PRC-1 · Chapter 9 · Question 51 of 100
Which of the following correctly describes an unfavorable (overdraft) balance in the cash book?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A credit balance
Explanation
In a business's cash book, the bank account is an asset. A credit balance means that withdrawals exceed deposits, indicating a liability or an unfavorable bank overdraft.
More Bank Reconciliations MCQs
- Q53An unfavorable (overdraft) balance on a bank statement is represented by a:
- Q54If bank charges of Rs. 500 were accidentally recorded twice in the cash book, how should this be corrected in the adjusted cash book?
- Q55A payment to a supplier of Rs. 1,200 was overstated as Rs. 2,100 in the cash book. Which of the following entries is required to correct…
- Q56A receipt of Rs. 7,500 was overstated as Rs. 8,500 in the cash book. Which of the following entries is required to correct this?
- Q57Bank charges of Rs. 150 were omitted entirely from the cash book. Which of the following actions is required?