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Method of Recording Banking Transactions

In case cash deposits into the bank

 

In customer’s book

In bank’s pass book

Bank A/c       Dr.

Cash A/c       Dr.

  To Cash A/c

  To Customers A/c

[Being bank the receiver so, “Debit the receiver” & Cash is going out so “Credit what goes out”]

[Being Cash coming in so, “Debit what comes in” & Customer is giving the cash so “Credit the giver”]


In case cash withdrawls from bank

 

In customer’s book

In bank’s pass book

Cash A/c       Dr.

Customers A/c       Dr.

   To Bank A/c

   To Cash A/c

[Being Cash coming in so, “Debit what comes in” & bank is giving the cash so “Credit the giver”]
 

[Being customer the receiver so, “Debit the receiver” & Cash is going out so “Credit what goes out”]

In other words, what is shown on the debit side of the customer’s cash book appears on the credit side of the bank pass book and vice versa. Hence, when the cash book shows a debit balance, the pass book shows a credit balance and vice versa.





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