Unfavourable bank balance means :a)Credit balance in Pass Bookb)favorable balance in Cash Bookc)Credit balance in Cash Bookd)Favourable balance in Cash BookCorrect answer is option 'A'. Can you explain this answer?

Question

Answer

Just because you have two thingsPassbook and cashbook Passbook Ka credit =.( + )Passbook Ka debit =.( -)  Cashbook. Debit=. (+)Cashbook.  Credit =  (-)Passbook.  Example interest credited by bank it means you add  balanceInterest debited by bank it means you less the amount from your Brs

Answer

Credit balance in cash book which means creditors will credit their money so it is unfavourable bank balance

Answer

Unfavourable bank balance refers to a situation where the balance shown in the Cash Book is in credit. In other words, it means that the amount recorded in the Cash Book is more than the amount shown in the Pass Book.

Explanation:
- The Cash Book is a record of all cash and bank transactions made by a business. It includes both cash receipts and cash payments.
- The Pass Book, on the other hand, is a statement provided by the bank that shows all the transactions related to a bank account, including deposits, withdrawals, and bank charges.
- The Cash Book and the Pass Book should ideally show the same balance, but in practice, there may be differences due to timing issues and errors in recording transactions.
- When the balance in the Cash Book is in credit, it means that more cash has been recorded as received than actually deposited in the bank.
- This can happen due to various reasons such as:
- Depositing cash into the bank but forgetting to record it in the Cash Book.
- Recording a higher amount of cash received in the Cash Book than actually deposited in the bank.
- Errors in recording transactions in the Cash Book.
- In such cases, the balance shown in the Pass Book will be lower than the balance shown in the Cash Book. This is because the Pass Book only reflects the actual transactions that have been processed by the bank.
- Thus, an unfavourable bank balance indicates that there are more cash receipts recorded in the Cash Book than actually deposited in the bank, leading to a credit balance in the Cash Book.

Conclusion:
Therefore, the correct answer is option 'A' - Credit balance in Cash Book. An unfavourable bank balance means that the balance shown in the Cash Book is in credit, indicating that more cash has been recorded as received than actually deposited in the bank.

Similar CA Foundation Doubts

Favourable balance as per Cash Book means

Favourable balance as per Cash Book Rs. 5,000. Debit side of Cash Book under cast by Rs. 2.000. Cheque deposited into bank Rs. 3,000 dishonoured but no entry for dishonour is made in cash book. Balance as per Pass Book is

While preparing bank reconciliation statement with favourable balance as per cash book which of the following will not be added?

When favourable balance as per cash book is the starting point, wrong debit by the bank to the firm will be

When expected value is negative the result is

Top Courses for CA FoundationView all

Quantitative Aptitude for CA Foundation

Principles and Practice of Accounting

Business Laws for CA Foundation

Business Economics for CA Foundation

Mock Tests & Past Year Papers for CA Foundation

Top Courses for CA Foundation

Top Courses for CA Foundation

Suggested Free Tests

Related Content

CA Foundation Courses

Other Courses

How To Prepare?

Other Exams

Company