Question

She opened a bank current account with her saving account. Accounting equation

Answer 1

Opening a current bank account by Cheque..

The current transaction affects two accounts...Bank a/c (Payer).. because We are paying through Cheque. ,Bank a/c(current account; payee)... because We are opening a current account..


The golden rules of accounting are...

Personal Account - Debit the receiver credit the giver

Nominal Account - Debit All expenses and losses, credit All incomes and gains

Real Account - Debit what comes in ,credit what goes out


Bank account is a Real account( Bank balance is an asset; all assets and Liabilities come under Real account)

in contention with the above rules....

Bank a/c (payee ; current account) should be debited..coz cash is comingin..

Bank a/c (Payer) should be credited..coz we are paying through Cheque,cash is going out


So the Journal Entry will be...

Bank a/c (current a/c) Dr xxxx

To Bank a/c xxxx

(being current account opened with an initial deposit)


There will not be any change in accounting equation..

asset is transforming into another asset...