Cash deposited into bank journal entry is a Bank Account Debit because This increases the bank account balance, reflecting the cash deposited into the bank and Credit to Cash Account This decreases the cash account balance, reflecting the reduction in cash on hand. Depositing cash into a bank account is a common transaction for businesses. This entry involves transferring funds from the cash account to the bank account, reflecting the movement of cash in the business’s records.
Key Concepts
- Cash Account: The account representing the cash on hand.
- Bank Account: The account representing the cash held in the bank.
Journal Entry for Cash Deposited into Bank
Example Scenario
Assume a company deposits ₹100,000 in cash into its bank account on 15-07-2023.
Step-by-Step Journal Entry
- Record the Cash Deposit
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 15-07-2023 | Bank Account | 100,000 | Cash deposited into bank | |
| 15-07-2023 | To Cash Account | 100,000 | Cash deposited into bank |
Explanation
- Debit to Bank Account: This increases the bank account balance, reflecting the cash deposited into the bank.
- Credit to Cash Account: This decreases the cash account balance, reflecting the reduction in cash on hand.
Conclusion
Accurately recording cash deposits into the bank ensures that the business’s cash and bank balances are correctly represented in the financial statements. Properly managing these transactions helps maintain accurate and reliable financial records, contributing to better cash flow management and financial reporting.
Ram’s A/C Dr. to Purchases return A/C 2000
yes purchase return entry right, thanks