Question

" April 2. Put RM11,000 of the cash into a bank account "

in the cash book, why does Cash goes to Bank in debit and why does Bank goes to cash in Credit.

I thought both are assets so debit is money in and credit is money out?

please explain for me to understand this easily.

ocash Bank Date Details Date Details Bank Cash am 2018 2018 do 11000 Bank Apr 2 Apr 2 cash 11,000

Answer 1

In this case, the cash is put into bank. So,,

• Bank Account receives the Benefit (COMES IN)
• Cash Account gives the benefit (GOES OUT)

So, as per the double entry system, Bank Account gets debited and Cash Account gets credited.

The Cash Book contains two columns ie, Cash a/c and Bank A/c, the credit and the debit may be found in the two Accounts within the same book. As explained, when cash is put into bank, the entry is Bank Account Dr. to Cash Account. So, under the debit side of Cash Book, that amount is written in Bank Column as “To Cash” and on the credit side of cash book, the amount is written in Cash Column as “By Bank”.

Such entries are referred to as 'Contra-entries' meaning opposite or against. In other words, both aspects of a single transaction are present within the same book, but in different sides viz one under debit and the other under credit.

(please comment in case of any further query regarding this matter)