Enter the following transactions in Cash Book.
(a) Cash in hand Rs.1000 and Bank overdraft Rs. 4000.
(b) Paid into bank Rs. 6000.
(c) Drew for office use Rs. 500.
(d) Paid to Basant Rs. 980 in full settlement of his account of Rs. 1000.
(e) Cash sales Rs. 9000.
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Answer:
A debit advice refers to an advice or a statement sent by bank to the account holder to notify him of the charges of the bank, it is similar to bank charges charged by bank. In the present case this charge of Rs.500 would be already charged by the bank and so the overdraft balance would have increased.
So, to adjust the same in the cash book Rs.500 will be credited.
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