A company has a negative (credit) balance in the Cash account at the end of the year. This amount can be called all of the following EXCEPT
A) bank indebtedness.
B) operating line of credit.
C) bank overdraft.
D) bank advances.

Question

Quizplus · Accepted Answer

A negative balance in the Cash account, indicating that the company has overdrawn its account, can be referred to as bank indebtedness, bank overdraft, or bank advances. However, an operating line of credit is a pre-approved amount of credit a business can borrow against, and does not directly refer to a negative balance in the Cash account.

A Company Has a Negative (Credit) Balance in the Cash