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Question
Observe the image and state the account in which it will be posted.
Options
Profit and Loss Account debit side
Balance Sheet liability side
Trading Account credit side
Balance Sheet assets side
MCQ
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Solution
Balance Sheet liability side
Explanation:
Business loans and bank overdrafts are borrowed funds (current or long‑term liabilities) and are shown on the liabilities side of the balance sheet, not in trading or profit & loss accounts.
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