Debit And Credit Balance In Cash Book Means
A Debit Balance in Cash Book means favorable, positive or normal balance. It means the company has either cash in the business or deposited into the bank to operate the business and finance its different projects. Credit B alance in cash book shows unfavorable, negative or unusual balance as it indicates either the company has no cash to meet its obligations (in order to run the business, the company needs cash urgently) or the company withdrew more than the cash kept at the bank account. This situation is called bank overdraft. In such case, it is the liability of the company to pay back the money exceeding the deposited amount. When the company deposited the amount into the bank, the bank deducts the amount of bank overdrafts and kept the remaining amount in the depositor' s bank account.