When Material in Amount, a Bank Overdraft Should Be Treated

question 8

Multiple Choice

When material in amount, a bank overdraft should be treated as a:

• A) current asset.
• B) current liability.
• C) current contra-asset.
• D) reduction in current assets.
• E) reduction in current liabilities.

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Definitions:

Dividends

Distributions from a company's earnings given to its shareholders by the corporation.

Net Income

The residual income of a company, which is calculated after expenses and taxes have been subtracted from total revenue.

Held-to-Maturity Debt Securities

Financial instruments that a company has the positive intent and ability to hold until their maturity date.

Insignificant Influence

A situation where an investor cannot exert control or significant influence over the investee.