Total of payments side can be greater than total of receipts side in case of bank column.

True

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False

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Solution

The correct option is A True
usually, the debit side bank column is always bigger than the credit side bank column. The difference will mean so much balance at the bank. But sometimes a bank allows a person an Overdraft (OD) i.e., he can draw more than he has deposited. In such a case, the credit side bank column will total more than the debit side bank column. When the total of the payments side exceeds the total of the receipts side, it will result in overdraft balance. Sometimes, a bank provides overdraft facility to its businessmen. This means that the withdrawal amount can exceed the deposit amount. But it is not possible in the case of cash column of the Cash Book, as a businessman cannot make payments that are greater than his/her receipts.

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Similar questions

State whether the following statements are TRUE or FALSE :

1. Total of payments side can be greater than total of receipts side in case of bank column.
2. Purchase of asset or stationery on credit is recorded in purchase book.
3. When goods are returned by buyer to seller, buyer sends a debit note.
4. Cheque received and deposited into bank on the same day is a contra entry.
5. Simple petty cash book is not very popular.
6. Interest on overdraft charged by bank is recorded in the cash column.
7. It is not necessary to record dishonor of cheques in the cash book.
8. Cheque book facility is available for fixed deposit account.
9. Businessman generally operates savings bank account.
10. A cash book is both a journal as well as ledger.
11. Cash book is a book of original entry.
12. Cash discount allowed is recorded on the debit side of cash book
13. Credit transactions are never recorded in cash book.
14. Endorsed cheques are always recorded on the payment side in the bank column.
15. A person who endorses the cheque is known as endorser.

All ___ are shown on the left hand side i.e. debit side of receipts & payments account.

All ________ are shown on the right hand side i.e. credit side of receipts & payments account.

Q. Receipts are recorded on the _______ side while payments are entered on the ______ side.

All of cash nature are shown on the right-hand side, i.e. credit side of receipts & payments account.

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