Question

Placed an amount in fixed deposit account at bank by transfer from Current bank account Rs 5000

Answer 1

Answer:

What is the journal entry for transferring amounts from a current account to a fixed deposits account?

In the cash book, the entry shall be

Fixed Deposit A/c Dr.

To Current Deposit A/c

As the asset value decreases in case of balance in the Current Deposit A/c, it is credited. But the fixed deposit account balance would be increased, and so it is debited.

Justification is based on Modern Rules.

For those looking for justification under Golden Rules,

The Bank Accounts are treated as Representative Personal Accounts. In which case, the Current Account gives money and the Fixed Account receives it. So debit the receiver and credit the giver.

Explanation:

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