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Question

Difference between the bank balance as per Cash Book and Pass Book may be due to ____________.

A
Overdraft
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B
Float
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C
Factoring
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D
None of the Above
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Solution

The correct option is B Float
Float refers to the amount of money tied up between the time a payment is initiated and cleared funds become available in the company's bank account. The efficiency of firm's cash management can be enhanced by having knowledge and use of various procedures aiming at accelerating cash inflows and controlling cash outflows.

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