Question

What will be the journal entry of this transaction : place on fixed deposit account at bank by transfer from current account ₹5,000

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Answer 1

Answer:

Explanation:

Fixed deposit A/c Dr 5000

To current A/c 5000

Answer 2

Fixed Deposit A/c Dr

To Current Deposit A/c

Explanation:

Due to the fact that the value of the asset is decreasing, we will credit the Current deposit account. And since the value of the fixed deposit value is increasing, we will debit the fixed deposit account. The golden rule of accounting we are using here is 'Debit the receiver and credit the giver'.

Here in our case the banks are considered to be personal accounts because the current account transfers money to the fixed accounts in the given question, therefore we use that rule of accounting.

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