If a company has overdrawn its bank balance, then O its cash account will show a debit balance. O the cash account debits will exceed the cash account credits. O its cash account will show a credit balance. O it cannot be detected by observing the balance of the cash account. Save for Later
(ANSWER) Option (C) Its cash account will show a credit balance. is correct . EXPLANATION :-
(Aus option (c) Its cash account will shown a Credit balance Reason Overdraft is a liability for the company. It results in the increase of Payment than the total Cash receipts. when the cash receipts are exceeded by the total Cash Payments, the resulting Cash balance will be the credit balance Hence, option (c) Its cash account will shown a Credit balance. * From the above explaination, option (a) its cash account will show a debit balance. Is WRONG • option (b) the cash account debits will exceed the Cagh account Credits . Is WRONG. . option (d) the a. it cannot be detected by Observing the balance of the Cash account.