Question

journal entry for opened current account with iob

Answer 1

the transaction affects two accounts here..... iob bank a/c and cash a/c ..where both of them fall under "Real" accounts category.... Going by the golden rules for accounting related to 'Real'accounts.."What Comes in should be debited and what goes out should be credited"..here since cash is outgoing or decreasing.it should be credited to that extent and since amount from bank is incoming/or increasing...it should be debited to that extent....When asset increases it should be debited and when it decreases should be credited.....

so the journal Entry for amount paid into bank to open a current account will be

iob bank a/c. Dr. xxxxx

To cash a/c. xxxxx

(being Cash paid into the bank for opening an iob bank account)