Question

Direct collection received by the bank on behalf of its customers will increase the balance as per the Bank Pass-book as compared to the balance as per the Cash-book.

• A. True
• B. False

Answer 1

The correct option is A True

True. Direct collection received by the bank will increase the balance as per pass book as the bank will credit the passbook as the funds are transferred into the customers bank account. This increases the bank passbook balance as compared to cash book balance as the customer has no information about such transaction and has not recorded it in the cash book. This difference in balance arises due to time difference in recording of the transaction.