If a Company Has Overdrawn Its Bank Balance, Then

question 175

Multiple Choice

If a company has overdrawn its bank balance, then

• A)its Cash account will show a debit balance.
• B)its Cash account will show a credit balance.
• C)the Cash account debits will exceed the cash account credits.
• D)it cannot be detected by observing the balance of the Cash account.

---

Definitions:

Resources

Assets or items of value owned by a company or individual, which can be used to produce goods, provide services, or generate income.

Corporation

A legal entity recognized by law that is separate from its owners, with the ability to own assets, incur liabilities, and sell shares to investors.

Assets

Resources owned or controlled by a business, expected to produce economic value or benefits in the future.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, obsolescence, or decline in value.