PRC-1 · Chapter 9 · Question 3 of 100
Which of the following describes a credit balance in the bank column of the cash book?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A bank overdraft.
Explanation
In a business's cash book, the bank account is an asset, which has a normal debit balance. A credit balance means that withdrawals have exceeded deposits, resulting in a bank overdraft liability.
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