Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 17 - No. 28)
If the bank balance in a company's cash book shows total credits greater than total debits, what does this mean?
The business has a positive bank balance.
The business has an overdraft.
The business's cash position is uncertain.
The business's cash position is incorrect.
Explanation
If total credits exceed debits, the account is overdrawn. This means the business has spent more than it had in the bank.
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