Question

Briefly explain the term 'favourable balance as per cash book'.

Answer 1

The favourable balance as per cash book means when the deposits made by the firm are more than its withdrawals in its bank account. 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. The credit balance as per pass book also indicates the favourable balance as per cash book.