Question

Unfavourable bank balance means _______________.

• A. Credit balance in pass book
• B. Debit balance in cash book
• C. Debit balance in pass book
• D. None of these

Answer 1

The correct option is C Debit balance in pass book

Unfavorable or negative balance means credit balance in cash book. This means that we have taken a loan from the bank i.e. we owe money to the bank. In such a case, the bank expects money from us and we become an asset for the bank. Assets have debit balance. So, the bank shows debit balance in our pass book, which is a copy of customer's account in the books of bank. So, an unfavorable balance in cash book represents debit balance in pass book.