What is the journal entry for cash withdrawn from bank?

In this modern business world, Banks performs various functions to an organization such as it accepts various deposits from the debtors, making 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The Journal entry for cash withdrawn from the bank is a contra entry.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 I am assuming that cash is withdrawn from the bank for business use.

 

Journal Entry for Cash Withdrawn from Bank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 from 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(Being cash withdrawn from the bank)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(Being cash withdrawn from the bank)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 purposes. 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(Being cash withdrawn from the bank)