Question

Bank sent debit advice of Rs 500 to company on overdraft. It wasn't entered in cash book. What will be the adjustment in cash book.

• A. Rs 500 will be debited
• B. Rs 500 will be credited
• C. Nonadjustable
• D. Rs 1000 will be subtracted

Answer 1

Answer: (B)

Rs 500 will be credited

A debit advice refers to an advice or a statement sent by bank to the account holder to notify him of the charges of the bank, it is similar to bank charges charged by bank. In the present case this charge of $Rs.500$ would be already charged by the bank and so the overdraft balance would have increased.

So, to adjust the same in the cash book $Rs.500$ will be credited.