In bank statement, cash deposited is shown as

Question

In bank statement, cash deposited is shown as

1. A. debit (Correct answer)
2. B. credit
3. C. expense
4. D. profit

Correct Answer

Option A — debit

Detailed Solution & Explanation

The correct answer is debit.

Key Points

• In the Cash Book (bank column), cash deposited into the bank is shown as a DEBIT entry — the company's bank asset increases.
• Note: in the bank's passbook (from bank's side), it appears as a credit.

Additional Information

• The confusion this question tests is one of perspective. In the firm's cash book, the bank column is an asset, so a deposit is a debit.
• In the bank's books the customer is a creditor, so the same deposit is a credit in the passbook. The two records mirror each other.
• That mirroring is exactly why a bank reconciliation statement is needed to explain differences between the cash book and the passbook.
• The rule underlying it: *debit what comes in* for real accounts — money coming into the bank account increases the asset.