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Question
Credit Balance in the Cash Book means:
Credit Balance in the Cash Book means:
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Solution
The correct option is B Overdraft as per Pass Book
A credit balance in cash book is a overdraft as per pass book. The bank maintains the customer account which is further printed in the passbook. The passbook is made from the view point of the bank hence customer depositing money is a liability to the bank and is credited. Therefore when the balance is unfavourable it shows a debit balance because they will receive money from the customer. The debits and credit of pass book and cash book are opposite.
A credit balance in cash book is a overdraft as per pass book. The bank maintains the customer account which is further printed in the passbook. The passbook is made from the view point of the bank hence customer depositing money is a liability to the bank and is credited. Therefore when the balance is unfavourable it shows a debit balance because they will receive money from the customer. The debits and credit of pass book and cash book are opposite.
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