1. The problem asks to identify what a favourable balance in a cash book indicates. 2. In accounting, a cash book records all cash receipts and payments, including bank transactions. 3. A favourable balance means the business has more cash or bank balance available, which is a positive sign. 4. A credit balance in a cash book usually indicates a bank overdraft, which is not favourable. 5. A debit balance indicates the business has money in the bank, which is favourable. 6. Bank overdraft means the business owes money to the bank, which is not favourable. 7. Adjusted balance is a reconciled balance after adjustments, not directly indicating favourability. 8. Therefore, the favourable balance in a cash book indicates a debit balance. Final answer: 2. Debit Balance