Debit and Credit Ledger selection on Cash Withdraw from Bank

Sometimes,we require Cash withdraw from our Bank Accounts for payment towards outstanding due and expenses.

Let's discuss,which Debit and Credit Ledger Accounts are involved in a transaction of Cash withdraw from Bank.

For an example,

In the Books of Mr.Sanjay Gupta the below mentioned transaction occurred 

Cash withdrawn from Indian Bank Current A/c for ₹73,000/- vide self Chq No- 890109 on dated 06/04/2020

Steps and Procedures for Decision making for Debiting and Crediting of Ledger Accounts of the above transaction

Step - 1

At first,our work is to search for the Ledger Accounts involved in the above transaction.

As a result two Ledger Accounts are identified.

One is Cash A/c,and another is Indian Bank Current A/c

Cash withdraw from Bank A/c

Step - 2 

In second step, we have to find out the Type of Ledger Accounts involved by using either one of the Accounting Approach.

The above two Ledger Accounts mentioned in step-1 are related to type

Real Account(Cash A/c) and Real Account(Indian Bank Current A/c) in Traditional Approach.

Asset Account(Cash A/c) and Asset Account(Indian Bank Current A/c) in Modern Approach.

Type of Ledger Accounts involved on Cash withdraw from Bank
Step - 3

In third step,we have to look at the nature or flow of the Ledger Accounts involved by using either one of the Accounting Approach.

Cash A/c comes in,to the business and Indian Bank Current A/c goes out from the business in Traditional Approach.

Cash A/c(Asset Account) increases and Indian Bank Current A/c(Asset Account) decreases in Modern Approach. 

Flow of Ledger Accounts on Cash withdraw from Bank
Step - 4

In fourth and final step,now it is time to place the Ledger Accounts in their respective column, i.e Debit Column or Credit Column by applying the Debit and Credit Rule using either one of the Accounting Approach.

Debit and Credit Rule
As a result,Cash A/c shows a Debit effect for ₹73,000/- and 

Indian Bank Current A/c shows a Credit effect for ₹73,000/-

Cash withdraw from Bank - Ledger Accounts are Cash A/c(Dr.) and Bank A/c(Cr.)

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Location: Mumbai, Maharashtra, India

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