If a Company Has Overdrawn Its Bank Balance Then

question 8

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.

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Definitions:

Weekly Salaries

Weekly salaries are fixed amounts paid to employees on a weekly basis as compensation for their work.

Salary Expense

The cost incurred by an employer for the payment of salaries to employees, considered an operating expense.

Salaries Payable

Liabilities representing the amounts owed to employees for work performed and not yet paid.

Salaries Accrued

This denotes the salaries that employees have accrued but the company has not yet disbursed.