PRC-1 · Chapter 9 · Question 2 of 100
If a bank statement shows a 'Debit' balance, what does this signify for the business?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) An overdrawn balance (bank overdraft).
Explanation
From the bank's perspective, a customer's positive deposit is a liability (credit). Therefore, a debit balance on a bank statement indicates that the bank is owed money, meaning the business has an overdraft.
More Bank Reconciliations MCQs
- Q4Which of the following items is NOT required to be adjusted in the revised/adjusted cash book?
- Q5Cheques issued by the business to suppliers but not yet presented to the bank for payment are known as:
- Q6Cheques received and deposited into the bank but not yet cleared or credited by the bank on the statement date are known as:
- Q7A customer directly transferred funds into the business bank account. The business was unaware until they received the bank statement. How…
- Q8A cheque received from a customer was deposited but later returned by the bank as 'dishonoured'. What is the correct adjustment in the…