What is a bank overdraft?

• When the bank owes the business money

• When the business withdraws more money than it has in its account

• A type of loan from a supplier

• A discount for early payment

In the cash book, a bank overdraft appears on the:

• Credit side

• Debit side

• Both sides
  

• Not recorded

Why is a bank overdraft considered a liability?

• It increases the profit of the business

• It is part of assets

• It represents money the business must repay

• It is part of petty cash

Which statement is TRUE about a bank overdraft?

• It is a permanent source of capital

• It is recorded in the petty cash book

• It is considered income

• It must be repaid and usually has interest

The petty cash book is mainly used for:

• Recording daily small expenses

• Recording credit sales

• Recording bank overdrafts

• Recording large purchases

The fixed amount kept in petty cash at the start of a period is called:

• Voucher

• Balance

• Imprest amount

• Cash float

Which of the following is NOT usually paid from petty cash?

• Stationery

• Postage

• Taxi fares

• Wages

The person responsible for petty cash is called:

• Cashier

• Auditor

• Accountant

• Petty cashier

The journal is also called:

• Book of final entry

• Cash book

• Book of original entry

• Ledger

The journal is used to:

• Record only cash transactions

• Record opening entries, closing entries, and errors

• Record credit sales only

• Prepare trial balance