Question

When payments made by the bank as per the standing instructions of the customer, the balance in the pass book will be more when compared to the cash book.

• A. True
• B. False

Answer 1

The correct option is B False

False. When payments are made by the bank on behalf of the customer, the bank will reduce the balance in the pass book. However, the customer will be able to reduce the balance in the cash book only when he receives information about the same. Thus the balance in cash book will be more than the pass book. This difference arises only because of time difference in recording of the transaction.