Favourable bank balance as per the cash book will be less than the bank passbook balance when there are unpresented cheques for payment.
True
Explanation
The statement is correct. When a cheque is issued (payment made), the business immediately records it in the Cash Book, reducing the favourable balance. However, if the cheque is unpresented, the bank has not yet processed it, so the amount remains in the Passbook. Consequently, the Passbook balance is higher than the Cash Book balance. This is supported by the context's numerical example, where 'Cheque issued but not presented' is added to the Cash Book balance to arrive at the Passbook balance.
Solution Steps
Step 1: Identify that unpresented cheques are payments recorded in the cash book but not yet debited by the bank.
Step 2: Recognise that recording the payment reduces the cash book balance immediately.
Step 3: Conclude that since the bank balance (passbook) is not yet reduced, it remains higher than the cash book balance.