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Maneet Kaur
  1. In this modern business world, Banks performs various functions to an organization such as it accepts various deposits from the debtors, makes payment to the creditors on the standing instructions of the company. Banks provide various agency and miscellaneous services to an organization. The JournalRead more

    In this modern business world, Banks performs various functions to an organization such as it accepts various deposits from the debtors, makes payment to the creditors on the standing instructions of the company. Banks provide various agency and miscellaneous services to an organization.

    The Journal entry for cash withdrawn from the bank is a contra entry. Cash can be taken from the bank for two uses either for personal use (or) business use. I am assuming that cash is withdrawn from the bank for business use.

    Journal Entry for Cash Withdrawn from Bank

    This journal entry can be recorded in two different accounting perspectives they are-

    1. Traditional Accounting Perspective

    ParticularsL.F.AmountNature of AccountAccounting Rule
    Cash a/c XXXRealDebit- What comes into the business.
     To Bank a/c  XXXPersonalCredit- The Giver.

    (Being cash withdrawn from the bank).

    2. Modern Accounting Perspective

    ParticularsL.F.AmountNature of AccountAccounting Rule
    Cash a/c XXXAssetDebit- The Increase in Asset.
     To Bank a/c  XXXAssetCredit- The Decrease in Asset.

    (Being cash withdrawn from the bank).

    Example

    On 15th May, Anna Ltd withdraws 5,00,000 from their Bank account for business purpose. Journalise the following transaction.

    DateParticularsL.F.AmountNature of AccountAccounting Rule
    15th MayCash a/c 5,00,000AssetDebit- The Increase in Asset.
      To Bank a/c  5,00,000AssetCredit– The Decrease in Asset.

    (Being cash withdrawn from the bank).

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