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A debit balance in the depositor’s Cash Book will be shown as:
- a)a debit balance on the Bank Statement.
- b)a credit balance on the Bank Statement.
- c)an overdrawn balance on Bank Statement.
- d)None of the above.
Correct answer is option 'B'. Can you explain this answer?
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Verified Answer
A debit balance in the depositor’s Cash Book will be shown as:a)...
The debit balance as per the cash book means the balance of deposits held at the bank. ... In other words, the excess amount withdrawn over the amount deposited in the bank.
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Most Upvoted Answer
A debit balance in the depositor’s Cash Book will be shown as:a)...
Explanation:
When there is a debit balance in the depositor's Cash Book, it means that the depositor has withdrawn more money from the bank account than the available balance. This results in an overdrawn balance in the depositor's account.
The Bank Statement, on the other hand, reflects the actual transactions and balances in the bank account. It is prepared by the bank and sent to the depositor.
Based on the given options:
- Option A: a debit balance on the Bank Statement: This is incorrect because a debit balance in the Cash Book does not necessarily mean a debit balance on the Bank Statement.
- Option B: a credit balance on the Bank Statement: This is the correct answer. When there is a debit balance in the Cash Book, it will be shown as a credit balance on the Bank Statement to reflect the overdrawn status.
- Option C: an overdrawn balance on Bank Statement: This is incorrect because an overdrawn balance is not specifically mentioned in the options.
- Option D: None of the above: This is incorrect because option B, "a credit balance on the Bank Statement," is the correct answer.
Therefore, the correct answer is option B: a credit balance on the Bank Statement.
When there is a debit balance in the depositor's Cash Book, it means that the depositor has withdrawn more money from the bank account than the available balance. This results in an overdrawn balance in the depositor's account.
The Bank Statement, on the other hand, reflects the actual transactions and balances in the bank account. It is prepared by the bank and sent to the depositor.
Based on the given options:
- Option A: a debit balance on the Bank Statement: This is incorrect because a debit balance in the Cash Book does not necessarily mean a debit balance on the Bank Statement.
- Option B: a credit balance on the Bank Statement: This is the correct answer. When there is a debit balance in the Cash Book, it will be shown as a credit balance on the Bank Statement to reflect the overdrawn status.
- Option C: an overdrawn balance on Bank Statement: This is incorrect because an overdrawn balance is not specifically mentioned in the options.
- Option D: None of the above: This is incorrect because option B, "a credit balance on the Bank Statement," is the correct answer.
Therefore, the correct answer is option B: a credit balance on the Bank Statement.
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Community Answer
A debit balance in the depositor’s Cash Book will be shown as:a)...
The correct answer is option 'B' - a credit balance on the Bank Statement.
When we talk about a debit balance in the depositor's Cash Book, it means that the depositor has recorded more withdrawals (debit entries) than deposits (credit entries) in their Cash Book. This results in a negative balance, indicating that the depositor owes money to the bank.
On the other hand, the Bank Statement is a document provided by the bank to the depositor, which shows the transactions made by the bank on behalf of the depositor. It includes deposits, withdrawals, charges, and any other activity related to the depositor's account.
Since the depositor has a debit balance in their Cash Book, it means that they owe money to the bank. When the bank prepares the Bank Statement, they will show this negative balance as a credit balance. This is because the bank's perspective is different from that of the depositor.
From the bank's point of view, the debit balance in the Cash Book represents a liability owed by the depositor. Therefore, the bank will show this liability as a credit balance on the Bank Statement.
Let's consider an example to illustrate this concept.
Suppose a depositor's Cash Book shows a debit balance of $500. This means that the depositor has recorded $500 more in withdrawals than in deposits.
When the bank prepares the Bank Statement, they will show this debit balance as a credit balance of $500. This indicates that the bank considers the depositor to owe them $500.
Therefore, a debit balance in the depositor's Cash Book will be shown as a credit balance on the Bank Statement.
Explanation:
When we talk about a debit balance in the depositor's Cash Book, it means that the depositor has recorded more withdrawals (debit entries) than deposits (credit entries) in their Cash Book. This results in a negative balance, indicating that the depositor owes money to the bank.
On the other hand, the Bank Statement is a document provided by the bank to the depositor, which shows the transactions made by the bank on behalf of the depositor. It includes deposits, withdrawals, charges, and any other activity related to the depositor's account.
Reasoning:
Since the depositor has a debit balance in their Cash Book, it means that they owe money to the bank. When the bank prepares the Bank Statement, they will show this negative balance as a credit balance. This is because the bank's perspective is different from that of the depositor.
From the bank's point of view, the debit balance in the Cash Book represents a liability owed by the depositor. Therefore, the bank will show this liability as a credit balance on the Bank Statement.
Example:
Let's consider an example to illustrate this concept.
Suppose a depositor's Cash Book shows a debit balance of $500. This means that the depositor has recorded $500 more in withdrawals than in deposits.
When the bank prepares the Bank Statement, they will show this debit balance as a credit balance of $500. This indicates that the bank considers the depositor to owe them $500.
Therefore, a debit balance in the depositor's Cash Book will be shown as a credit balance on the Bank Statement.
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A debit balance in the depositor’s Cash Book will be shown as:a)a debit balance on the Bank Statement.b)a credit balance on the Bank Statement.c)an overdrawn balance on Bank Statement.d)None of the above.Correct answer is option 'B'. Can you explain this answer?
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