A credit balance in the bank column of a cash book signifies: MCQ with Answer and Explanation

A credit balance in the bank column of a cash book signifies:
A. Bank overdraft
B. Fixed deposit
C. Error in accounting
D. Cash at bank
Answer: Option A
Solution (By JKSSB Mock Tests)
Since bank is an asset (usually debit balance), a credit balance means the business has withdrawn more than deposited, creating an overdraft liability.

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Practice More Accountancy and Book Keeping Questions

Question #1
The 'Stratified Sampling' in audit:
A. Selects all high-value items
B. Selects items randomly
C. Ignores low-value items
D. Divides the population into homogeneous subgroups and selects samples from each

Correct Answer: Option D


Explanation:
Stratification improves audit efficiency by grouping items with similar characteristics.

Question #2
The 'Going Concern Concept' implies:
A. The business will continue for the foreseeable future
B. The business will be closed within a year
C. The business will merge with another
D. The business is bankrupt

Correct Answer: Option A


Explanation:
It assumes the entity will continue operations and not liquidate.

Question #3
Direct taxes are progressive in nature because:
A. They are only on goods
B. They are collected indirectly
C. Rate is same for all
D. Rate increases with income level

Correct Answer: Option D


Explanation:
Direct taxes like income tax have higher rates for higher income slabs, making them progressive.