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Question

Excess of bank withdrawal over bank deposits __________.
  1. Overdraft
  2. Cash balance
  3. Bank balance
  4. Loan

A
Loan
B
Overdraft
C
Bank balance
D
Cash balance
Solution
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The opening cash and bank balances are recorded on the debit side of the cash book. Sometimes a businessman withdraws excess amount from the bank (from his bank account) and the closing bank balance of a month is a credit balance. This balance amount is called 'Bank Overdraft'. It is written on the credit side of the bank column of the cash book as opening balance.

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