Bank Overdrafts, If Material, Should Be

question 109

Multiple Choice

Bank overdrafts, if material, should be

• A) reported as a deduction from the current asset section.
• B) reported as a deduction from cash.
• C) netted against cash and a net cash amount reported.
• D) reported as a current liability.

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Definitions:

Long-Lived Assets

Assets with a useful life longer than one year, such as buildings, machinery, and equipment, used in the operation of a business.

Held for Sale

Assets or business segments classified as being available for immediate sale and expected to be sold within one year.

Normal Balance

The typical or expected balance of an account in double-entry bookkeeping, which is either debit for assets and expenses or credit for liabilities, equity, and revenue.

Accumulated Depreciation

The total amount of depreciation that has been charged on an asset since it was acquired, representing its decrease in value.