Concept:A dishonored cheque reverses the earlier bank receipt entry, so it is recorded on the credit side of the cash book.
Explanation:When a cheque is received and deposited, the bank column of the cash book is debited.
If the cheque is not honored by the bank, the bank reduces the account balance.
To cancel the previous debit, the same amount is now credited in the cash book.
This credit entry shows the reduction in the bank balance.
Hence, a dishonored cheque is credited in the cash book, not debited or entered twice.
Answer:B. credited in the cash book