Question

Crediting an account by the bank means a decrease to that account.

True

False

Answer 1

False,

It means, Crediting account by Bank will increase to that account.

Any transaction that takes place through bank is supposed to be simultaneously recorded in the books. For example if cash is deposited in the customer’s account, it is debited in the bank column of cash book, while it is credited in the customer account or pass book. Similarly, if cash is withdrawn from bank or payment is made through bank , the bank column of the cash book is credited and customer account or pass book is debited. As a result, it is supposed that the cash balance at bank shown by both cash book and pass book or customer account is always same.