Question

Briefly explain the statement ‘wrongly debited by the bank’ with the help of an example.

Answer 1

When a company issues a cheque for Rs. 1,500 to any of its employees, the bank pays it, but instead of Rs. 1,500, the bank debits it incorrectly by Rs. 15,000. The on top of error might also be the opposite, but in both cases, the balances of the money book and the passbook will not match. The word refers to the possibility that the bank will debit the account incorrectly. It usually occurs at the moment of posting the transactions.