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bank entry

28 December 2018

If we receive amount in bank then it is shown as credit
but
what comes in is debit and what goes out is credit.....why?
why there is such diffrence?

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12 Replies

Aman Kumar (Accounts Executive) (744 Points)
Replied 28 December 2018

bank A/c. Dr
debtors A/c. cr
as per golden rules
personal account - example debit the receiver and credit the giver.

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Soni Darshan (41 Points)
Replied 28 December 2018

could not understand
plz explain briefly

Aman Kumar (Accounts Executive) (744 Points)
Replied 28 December 2018

The Golden Rules of Accounting

Debit The Receiver, Credit The Giver. This principle is used in the case of personal accounts
in case you received amount in bank by Mr X
so entry is
Bank. A/c. Dr
Mr. X. A/c. cr

in case you paid money to Mr X
so entry is
Mr. X. A/c Dr
To Bank. A/c. Cr

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Soni Darshan (41 Points)
Replied 28 December 2018

can you connect this example with bank?

Aman Kumar (Accounts Executive) (744 Points)
Replied 28 December 2018

Bank is opposite : you received amount in your bank account ,so your account is credit
you paid amount to anyone from your bank ,so your account is debit

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Soni Darshan (41 Points)
Replied 28 December 2018

why this is so?

Aman Kumar (Accounts Executive) (744 Points)
Replied 28 December 2018

as per golden rules
Nominal account - example all expense are debit and all income is credit.
you need to read Golden rules

Soni Darshan (41 Points)
Replied 28 December 2018

i said if we receive amount in bank then we receive msg of bank show this as credit?
though bank is dr.

Aman Kumar (Accounts Executive) (744 Points)
Replied 28 December 2018

No,you receive amount ,so your bank is credit.
when you paid to anyone from your bank so your bank is debit

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Soni Darshan (41 Points)
Replied 28 December 2018

okk thanks brother

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Gokul Vasudevan (Student) (47 Points)
Replied 29 December 2018

From the customers point of view, bank deposits are their assets but from the banks point of view the deposits they collected are their liability. Hope you understood.