The amount of cheque deposited but not cleared by the bank should be __________ from the cash book, if there is__________ f balance in the cash book.
subtracted; favourable
To understand how to adjust the cash book when cheques have been deposited but not yet cleared by the bank, we need to comprehend the concept of 'favourable' and 'unfavourable' balances.
Favourable Balance: A positive balance in the cash book indicates that the business has a surplus. When a cheque is deposited but not cleared, it is not yet added to the bank's balance. Therefore, we should subtract this amount from the cash book to reflect the actual cash available.
Given the question:
The amount of cheque deposited but not cleared by the bank should be subtracted from the cash book, if there is a favourable balance in the cash book.
The correct option is: subtracted; favourable.
Important Questions from Money Market
What is ‘Issue Price’?
_________ is a situation in the bonds market when the rate of interest falls to its lowest level and the speculative demand for money becomes perfectly elastic.
________ is the money which is accepted as a medium of exchange because of the trust between the payer and the payee.
When the general interest rate reaches a very low level, which of the following statements will be correct?
Choose incorrect statement from the following:
1. 28 Days T - bills were introduced in 1998
2. 364 Days T - bills were introduced in 1992
3. 182 Days T - bills were introduced in 1986
4. 273 Days T - bills were introduced in 2006
