Cash Withdrawal From Bank For office use Journal Entry is Cash Account Debit and Bank Account Credit. When a business withdraws cash from its bank account for office use, it needs to record this transaction accurately to reflect the decrease in the bank balance and the increase in cash on hand.
Key Concepts
- Cash Account: The account representing cash on hand.
- Bank Account: The account from which cash is withdrawn.
Journal Entry for Cash Withdrawal from Bank for Office Use
Example Scenario
Assume a company withdraws ₹15,000 from its bank account on 25-10-2023 for office use.
Step-by-Step Journal Entry
- Record the Cash Withdrawal
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 25-10-2023 | Cash Account Dr | 15,000 | Cash withdrawn from bank for office use | |
| 25-10-2023 | To Bank | 15,000 | Withdrawal of cash from bank |
Explanation
- Debit to Cash Account: Increases the cash account, reflecting the cash now available on hand for office use.
- Credit to Bank Account: Decreases the bank account balance, reflecting the withdrawal made.
Conclusion
Accurately recording cash withdrawals from the bank for office use is essential for maintaining precise financial records and ensuring accurate tracking of cash flows. Properly managing these transactions helps ensure that the business’s cash balances are accurately represented in the financial statements, contributing to better financial management and reporting.