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

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A credit balance in the bank column of cash book indicates:

A. Petty cash balance

B. Cash at bank (favourable)

C. Bank overdraft

D. Fixed deposit

Answer: Option C

Solution (By JKSSB Mock Tests)

A credit balance in bank column means the firm owes money to bank, i.e., bank overdraft.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

The 'Dispute Resolution Committee' (DRC) under Income Tax deals with:

A. All taxpayers

B. Large corporates

C. Small taxpayers with returned income up to ₹50 lakh and disputed demand up to ₹10 lakh

D. Non-residents

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Correct Answer: Option C

Explanation:
DRC facilitates resolution of disputes for eligible small taxpayers.

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Question #2

Goods withdrawn by the proprietor for personal use are recorded by:

A. Debiting Drawings, Crediting Purchases

B. Debiting Drawings, Crediting Sales

C. Debiting Capital, Crediting Cash

D. Debiting Purchases, Crediting Drawings

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Correct Answer: Option A

Explanation:
Drawing goods reduces the stock of items bought for resale, so Purchases A/c is credited at cost price.

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Question #3

The system of recording transactions where each transaction is recorded once only is called:

A. Cash basis

B. Single entry

C. Mercantile

D. Double entry

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Correct Answer: Option B

Explanation:
Single entry system does not record both aspects; often only personal accounts are maintained.

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