Foundation
Elements Of Book Keeping And Accountancy
Bank Reconciliation Statement
Question
Unfavorable bank balance means ________________.
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Solution
The cash book is a account statement as maintained by the account holder. So if the cash book reflects a credit balance it means that the account is in the nature of a creditor/payable for the account holder and it would be the opposite for the bank.
The pass book is a copy of the account statement as maintained by the bank. So if the pass book reflects a debit balance it means that the account is in the nature of a debtor/receivable for the bank and it would be the opposite for the account holder.
So from the account holder's point of view he would be having a negative/unfavourable balance in his account in both the above situations whereas for the bank it would be the opposite.
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