Favourable bank balance means:
Explanation
Option D is correct because the provided text states that a debit balance as per the cash book indicates the deposits held at the bank, which is a favourable balance. Simultaneously, the text notes that this same balance appears as a credit balance in the passbook (bank's books). Therefore, a favourable bank balance is represented by a debit balance in the cash book or a credit balance in the passbook.
Solution Steps
Step 1: Analyze the definition of favourable balance in the context. The text states, 'The debit balance as per the cash book means the balance of deposits held at the bank... It indicates the favourable balance as per cash book'.
Step 2: Relate the cash book balance to the passbook balance. The text mentions, 'The debit balance of the bank account as per the cash book should be equal to the credit balance of the account of the business in the books of the bank.'
Step 3: Conclude that since a favourable balance is a debit balance in the cash book and corresponds to a credit balance in the passbook, both (b) and (c) are correct.