Bank column of the cash book can have credit balance . Why ?

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Solution

If bank allows the customer to draw more money from bank account than the actual amount lying in the bank account, then it will have negative balance. Such negative bank balance is called overdraft balance.

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When bank column of a cash book shows a credit balance, what does it mean?

A debit balance in bank column of cash book is always equal to the credit balance in the account of Mr. X in the books of bank.

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