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Journal entry for bank overdraft

Laxmi (Student) (74 Points)

04 May 2011

What is the journal entry for bank overdraft in firms book and also what is the entry passed by bank in their books?

What is the journal entry for dishonour of cheque in firm's books and in bank account?

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19 Replies

Devendra (Chartered Accountant) (4775 Points)
Replied 04 May 2011

In the given case, Bank Overdraft is a liability (ie. Credit balance in the Bank A/c).

Following is the JV to be passed:-

(In the Books of the Firm)

Cash / Bank A/c Dr.

To Bank Overdraft A/c

(Being Overdraft received from Bank)

(In the books of Bank)

Bank Overdraft A/c Dr.

To Cash / Bank A/c

(Being Overdraft given to Customer).

Regards,

Devendra

3 Like

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Laxmi (Student) (74 Points)
Replied 04 May 2011

Thanks Devendra,

So where does it appear in bank statement on debit side or credit side?

Plz answer for entries for dishonour of cheque?

Devendra (Chartered Accountant) (4775 Points)
Replied 04 May 2011

In the bank's book it will be shown as receiable from the customer ie. on the Debit side.

Whereas in the firm's book it will be shown as payable to the bank ie. on the Credit side.

Regards,

Devendra

Devendra (Chartered Accountant) (4775 Points)
Replied 04 May 2011

Following are the entries :-

(In the Firm's Books)

When payment is made to a Creditor trough Cheque.

Creditor A/c Dr.

To Bank A/c

(Being payment made.)

When the cheque is dishonoured.

Bank A/c Dr.

To Creditor A/c

(Being cheque received back due to dishonour)

Regards,

Devendra

Mayson (Others) (35 Points)
Replied 15 July 2015

hi devendra the first entry u wrote is for cash deposit i.e. cash a/c...dr to bank od a/c...cr. am i right?

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Mayson (Others) (35 Points)
Replied 15 July 2015

hey devendra which is the debit and credit side in bank statement ... deposit and withdrawl? also i would like to know that when is dishonoured means cheque return rite? so entry would be bank charges...dr. to bnk od...cr.

JYOTI GUSAIN (ACCOUNTANT) (34 Points)
Replied 02 June 2017

Its not the cash deposit entry. This is the entry for cash received from bank.(i.e overdraft)

Cash / Bank A/c Dr.

To Bank Overdraft A/c (Being Overdraft received from Bank)

JYOTI GUSAIN (ACCOUNTANT) (34 Points)
Replied 02 June 2017

Dishonoured entry

Debtor a/c Dr

To bank a/c.....

Naitik mishra (Bareilly) (24 Points)
Replied 13 September 2018

What about in internal reconstructi

Naitik mishra (Bareilly) (24 Points)
Replied 13 September 2018

And what about entries in case internal reconstruction

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Iyyappan Nadar (2 Points)
Replied 21 September 2018

What will be entry for interest on overdraft was not posted to the ledger from the cask book

Taj Waziri (4 Points)
Replied 13 September 2019

Bank overdraft $500. Sir how to pass double entry

Taj Waziri (4 Points)
Replied 13 September 2019

Bank overdraft $500. Sir how to pass double entry

shahyar husain (1240 Points)
Replied 10 November 2020

In this case, the bank overdraft accounting treatment will be to include it as an Accounts Payable journal entry, with a coinciding increase to the total cash entry to balance. Generally, the bank overdraft in the balance sheet will be reported as a bank overdraft double entry.