Practicing Success
The excess amount withdrawn over the amount deposited in the bank is called: |
Overdraft Unfavourable balance as per cash book Credit balance as per cash book All of these |
All of these |
The correct answer is option 4- All of these. While preparing the Bank Reconciliation Statement without adjusting Cash Book Balance, the balance as per cash book or as per passbook is the starting item. The debit balance as per the cash book means the balance of deposits held at the bank. Such a balance will be a credit balance as per the passbook. Such a balance exists when the deposits made by the firm are more than its withdrawals. It indicates the favourable balance as per cash book or favourable balance as per the passbook. On the other hand, the credit balance as per the cash book indicates bank overdraft. In other words, the excess amount withdrawn over the amount deposited in the bank. It is also known as unfavourable balance as per cash book or unfavourable balance as per passbook. |