Question

While preparing 'Annual financial Statement', the 'credit balance' shown by the Bank Pass Book should be treated as _______________.

• A. a liability
• B. An asset
• C. An income
• D. An excess of payments over receipts

Answer 1

The correct option is B An asset

A bank passbook is always 'prepared' keeping in mind the bank's position and not the customer's position.

So generally if you read any bank passbook/ bank statement you will see Rs.XXXX Cr. which means the customer is the creditor of the bank and the bank is liable to pay to the customer.

Money is receivable by the customer and hence it is an asset for the customer.