Question 30
Not-for-Profit OrganisationsA credit balance on a receipts and payments account indicates that the non-profit making organization
- A.had more revenues than expenses during the period
- B.did not owe much liabilities during the period
- C.received more cash than it paid out during the period
- D.made more cash payments than it received during the period.
Show the answer and explanation
Answer: D (made more cash payments than it received during the period.)
Explanation
A credit balance means payments exceeded cash available, i.e. a bank overdraft.