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.

Question

Quizplus · Accepted Answer

When a company has overdrawn its bank balance, it means it has spent more than it has in its bank account, resulting in a negative balance. In accounting, this is reflected as a credit balance in the Cash account.

If a Company Has Overdrawn Its Bank Balance, Then