Bank o/d account entry

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Irshad

Irshad (Querist)
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07 October 2018 Let me know how to pass entry in books OD a/c opened in banks

CA GUNJIT KAUR-FACULTY AT ICAI

CA GUNJIT KAUR-FACULTY AT ICAI (Expert)
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07 October 2018 When we open a normal bank account ie dr balance entry we pass is:
Bank a/c dr
to Cash
In this case since it is case of bank overdraft entry will be:
Bank a/c dr/cash a/c dr
to bank overdraft a/c
(Being overdraft received from bank)

ABove entry is in books of firm/ individual who willl take over draft from bank
Whereas bank will pass the following entry in its books:
Bank overdraft dr
to cash/ bank
(Being overdraft a/c opened for the concerned customer)