Question 45
Banking and Bank ReconciliationA bank statement shows a debit balance of Le 475. After the entry of an uncredited cheque of Le 800, the new balance is
- A.Le 325 overdraft
- B.Le 325
- C.Le 1,275
- D.Le 1,275 overdraft
Show the answer and explanation
Answer: B (Le 325)
Explanation
A debit balance is an overdraft of 475; lodging 800 turns it into a favourable (credit) balance of 800 − 475 = Le 325.