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Home/cash withdrawn from bank

Discy Latest Questions

Maneet Kaur
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cash withdrawn from bankjournal entry
  1. Dheeraj

    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    The Journal entry for cash withdrawn from the bank is a contra entry.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 I am assuming that cash is withdrawn from the bank for business use.

    Journal Entry for Cash Withdrawn from Bank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

    Particulars L.F. Amount Nature of Account Accounting Rule
    Cash a/c   XXX Real Debit- What comes into the business.
     To Bank a/c    XXX Personal Credit- The Giver.

    (Being cash withdrawn from the bank).

    2. Modern Accounting Perspective

    Particulars L.F. Amount Nature of Account Accounting Rule
    Cash a/c   XXX Asset Debit- The Increase in Asset.
     To Bank a/c    XXX Asset Credit- 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    (Being cash withdrawn from the bank).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.

    Date Particulars L.F. Amount Nature of Account Accounting Rule
    15th May Cash a/c   5,00,000 Asset Debit- The Increase in Asset.
       To Bank a/c    5,00,000 Asset Credit– The Decrease in Asset.

    (Being cash withdrawn from the bank).

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