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WAEC Accounting 2016 Paper

Question : 6

Total: 50

Solution:

Concept:

An overdraft means the bank account has a negative balance.

Explanation:

Kofi's deposit is used to clear the overdraft first.

The deposit is

\text{GH₵\,400,000}

The existing overdraft is

\text{GH\u20b5\,190,000}

Subtract the overdraft from the deposit:

\text{GHS}\,400,000 - \text{GHS}\,190,000 = \text{GHS}\,210,000

So the account now has a positive balance of

\mathrm{GHS}\,210{,}000

It is not overdrawn.

Answer:

\mathrm{GHS}\,210{,}000

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