Overdraft as per cash book means ___________.

credit balance in the cash column of the cash book

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credit balance in the bank column of the cash book

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neither of the two

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both (a) and (b)

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Solution

The correct option is A credit balance in the bank column of the cash book
Overdraft means that we have taken loan from the bank. It is shown by negative or credit balance. The cash book is debited when cash comes in and credited when cash goes out. So, overdraft means credit balance in the bank column of the cash book.

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