India Bank Statement: Withdrawls and Deposits pls explain

[mayson]

In a bank statement, in the particulars column it is written "By Cash" and in the deposit column amt is Rs. 3000/- .
So can you pls tell journal entry fot it.
The account type of this bank is Overdraft Trade Credit.

 

[smallbushelp]

I'm not sure I understand your question but it sounds like you're describing a cash deposit to a bank account. Was it an advance from the bank to cover checks written by the company? If so, then it would be treated as a short term loan from the bank. The transaction would be to debit cash (the bank account) and credit a liability account, maybe "overdraft loan payable" or something similar.

 

[mayson]

hi
thank u for the ans
so if it is for withdrawl then entry will be bank od a/c ...dr to cash a/c...cr.
i am sorry for asking again and again but as this is an overdraft account so am asking as i have heard that the entry for this will be the opposite for what we generally do for withdrawl or deposit of cash.
pls correct me if i am wrong

 

[smallbushelp]

No, I don't think you've got it right. Your use of the term "bank overdraft account" is what is causing some confusion. A usual or common bank account for me is an asset account on my balance sheet. It's my cash account. Is this overdraft account an asset or a liability account on your balance sheet? If it is an asset account and you are withdrawing money from it, then you would credit the overdraft account and debit the other bank account.

But if the overdraft account represents money that you are borrowing from the bank to put into your cash account, then it should not be on your balance sheet as an asset account. It should be a liability account because it represents money that you have to pay back.

Anytime you deposit cash, it is a debit entry. And anytime you withdraw cash, it is a credit entry. Start with the cash side of the transaction, that should then guide you with the other side of the transaction.