Question 7
Banking and Bank ReconciliationA debit balance on a bank statement indicates that
- A.bank is a debtor to thecustomer
- B.customer is a debtor to the bank
- C.bank is not a creditor to the customer
- D.customer is not a debtor to thebank.
Show the answer and explanation
Answer: B (customer is a debtor to the bank)
Explanation
On the bank's statement a debit balance is an overdraft: the customer owes the bank.