Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 37 - No. 25)
What happens when a business pays its employees' salaries via bank transfer?
The cash balance increases.
The bank balance increases.
The cash balance decreases.
The bank balance decreases.
Explanation
Paying salaries by bank transfer reduces the company's bank balance, because the money is taken out of the bank account.
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