Economy, asked by Anonymous, 1 year ago

Questions related to THREE - COLUMN CASH BOOK.
Why is put the entry in the credit side of an account when the cheque deposited in the bank becomes dishonored (bounced.)
Question related to JOURNAL ENTRIES :
What is the journal entry for drawings from bank for personal use and drawings from the business for personal use. and explain the reason.

Answers

Answered by arnav98

As the bank balance becomes negative as they entered wrong entry , it is tranferred to credit side.

2.

Journal entry :-

Drawings from bank for personal use.

Drawing A/c Dr.
To Bank's A/c

Drawing A/c Dr.
To Cash A/c ( in case of Money )

Drawing A/c Dr.
To Purchases A/c ( In case of goods )

Anonymous: why drawings is debited in all these cases??

arnav98: First the draw or withdrawal by the owner reduces the capital account. Second, because each transaction involves a debit and a credit, and because a withdrawal of cash requires a credit to the Cash account, the owner's drawing account will need a debit for the same amount.

arnav98: It was only on the google

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