Overdraft as per the passbook is less than the overdraft as per cash book when there are cheques deposited but not collected by the banker.
False
Explanation
When cheques are deposited but not collected by the banker, the cash book immediately records the deposit, which reduces the overdraft balance. However, the passbook does not reflect this deposit until the bank actually collects the funds. As a result, the passbook continues to show a higher (more) overdraft compared to the cash book. Therefore, the overdraft as per passbook is MORE than the overdraft as per cash book, not less. This aligns with Context Point 4 which states that cheques deposited but not collected increase the balance of the cash book when compared to passbook, meaning the cash book overdraft becomes smaller.
Solution Steps
Step 1: Understand that cheques deposited but not collected are recorded in the cash book immediately but not yet in the passbook.
Step 2: When deposited cheques reduce the overdraft in the cash book, the passbook overdraft remains higher since the bank hasn't collected the funds.
Step 3: Conclude that overdraft as per passbook is MORE than overdraft as per cash book, making the given statement False.