Bank passbook or bank statement

The bank gives its customers a passbook or bank statement. Passbook or bank statement is a copy of the customer account in the bank’s books. The bank keeps the customer informed about the entries in his books. It is expected that the customer compares the pass book with the cash register (bank columns) and immediately informs the bank of any errors that may have come to his attention.

The bank statement is similar to the passbook with the only difference being that it is on loose sheets. The bank statement is sent by the bank to its own customer, whereas it is the customer’s duty to send the access card to the bank in order to be updated. Registration of bank transactions Bank transactions are recorded in a three column cash book. However, the triple pillar cash book is not maintained, the transactions will be recorded.

The diaries are as follows:

Current account

When cash is deposited in the bank

Bank account … Dr

For cash account (for cash deposited in the bank)

When cash is withdrawn from the bank for use in business.

Cash account … Dr.

To bank account (for cash withdrawal)

When payment is made to creditor by check to settle his account.

Creditors account …

To bank account (for issued check to settle his account.)

When an expense is covered by the check.

Expense account …. Dr.

To bank account (for expenses paid by check)

When a check is issued to cover the holder’s personal expenses.

Drawing account …

To bank account (for check issued to meet personal expenses.)

When a check or draft is received from a party.

Cash account … Dr.

For personal account (for check received)

When checks or drafts received are paid into the bank.

Bank account … Dr.

To cash account (for received check paid into the bank)

When check or draft is received from a party and paid out at the bank on the same day.

Bank account … Dr.

For personal account (for check received and paid into bank)

When a customer pays the money directly to the bank.

Bank account … Dr.

To the customer’s account (for payment made by a customer directly to the bank)

When a check or draft is received from one party and approved in favor of another.

Endorsee’s personal account …

To the payee’s personal account (for check received from – approved to -).

When bank debits customer’s account with the incidental fees or collection costs.

Bank Account Account … Dr.

To bank account (for bank charges levied by bank)

When a bank credits the customer’s account with interest.

Bank account … Dr.

To interest account (for interest credited by the bank)

When check is dishonored

Personal account (party from which check was received)

To bank account … Dr.

(if sent to the bank)

To Endorsee’s personal account (If the check was approved)

When drafts are purchased from the bank and sent to one. Personal account … Dr.

Bank Account Account … Dr.

To cash account (for drafts purchased and sent to-)

Fixed deposit account

When the amount is deposited into a fixed deposit account.

Fixed Deposit Account …

For cash account (for cash deposited in a fixed deposit account)

When fixed deposit is made when issuing a check.

Fixed Deposit Account …

To bank account (for check issued and deposited in fixed deposit)

When interest is due on fixed deposit. Fixed deposit account to interest account (for interest due on fixed deposit account)

When cash is received by realizing a fixed deposit.

Cash account … Dr.

For fixed deposit account (for cash received on realization of fixed deposit)

When the amount of the fixed deposit is paid into the bank account.

Bank account … Dr.

To a fixed deposit account (for a fixed deposit amount upon realization paid into a bank account)

SpareBank

When money is paid into savings account account.

Savings account …

For cash account (for cash paid into savings account)

When interest is due.

Savings account …

To interest account (for interest credited by the bank)

When cash is withdrawn from the bank

Cash account … Dr.

Saving bank account (for cash withdrawn from bank)

Bank loans

When loans are given in cash

Cash account … Dr.

To bank account (for loans drawn from bank)

When the loan amount is credited by the bank in the current account.

Bank account … Dr.

To bank loan account (for loans credited by bank in ‘current account)

When interest is due on loans. Interest account for bank loan account (for interest due on loans)

When the loan is repaid.

Bank Loan Account …

To cash account (if paid in cash)

To bank account (if repaid by check).