Project for Practice - Security Deposit for Rent - Date:01/04/2021 - Trading Business - Proprietorship Firm - M/s. R S Food Products

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Name of the Business Owner/Proprietor - Mr. Rohit Sharma

Trade Name - M/s. R S Food Products

Address : Bhubaneswar, Odisha, India - 751001

GSTIN - 21ODISH5132A1ZK

Nature of Business - Whole Sale and Retail Sale of Edible Oil/Cooking Oil.

Financial Year : 2021-22(from date 01/04/2021 to 31/03/2022)

Business Commencement/starting date - 01/04/2021

Date of Transaction : 01/04/2021

Amount paid to Amaresh Kumar towards Security Deposit for Office and godown rent vide Chq No-500145 of Indian Bank SB A/c No-6350. for ₹40,000/-.

Practical procedure to record the above transaction.

Let's us go with a step by step systematic procedure to record this transaction in Books of Account.

Step - 1

In first step, one have to decide Debit and Credit Ledgers involved in this transaction

In the above transaction,

Debit Ledger is :
  • Security Deposit for Rent A/c

Credit Ledger is :

  • Indian Bank SB A/c No-6350

Step - 2

Preparation of supporting documents which can give the details of transaction.

Issue Cheque No-500145 of Indian Bank SB A/c No-6350. for ₹40,000/-.

Write the details of Payment made through Chq No-500145 on the Cheque acknowledgement slip available in Cheque Book i.e Date of Cheque, to whom paid and purpose of Payment for future reference.

Step - 3

In case of Manual/pen and paper mode of Book Keeping

Recording and posting of transaction from the issued Cheque No-500145 of Indian Bank SB A/c No-6350 into their respective Books of Account and Ledger Accounts.

Related Books of Account and Ledger Accounts for this transaction.

  • Journal Book/Journal Register

  • Bank Book : Indian Bank SB A/c No-6350

  • General Ledger Book : Security Deposit for Rent A/c

Procedure to Record/post this transaction into the above mentioned Books of Account.

Entry in Journal Book/Journal Register as mentioned in the format below.

Write :

  • Date of transaction in Date column.

  • Security Deposit for Rent A/c in Particulars column.

  • 'Dr.' at right hand side of Security Deposit for Rent A/c in Particulars column.

  • Security Deposit amount in Debit amount column for ₹40,000/-.

  • Indian Bank SB A/c No-6350 just below the Security Deposit for Rent A/c in Particulars column using prefix word 'To'.

  • Security Deposit amount for ₹40,000/- in Credit Amount column.

  • Narration just below the Indian Bank SB A/c No-6350 in Particulars column.

  • Folio numbers after entering the transaction into their respective Ledger Accounts. 

Journal Entry-Security Deposit for Rent-R S Food Products
Entry in Bank Book(Indian Bank SB A/c No-6350) as mentioned in the format below :

Write on the Payments Side as mentioned below.

  • Date of transaction in Date Column.

  • Security Deposit for Rent A/c using prefix 'By' in Particulars column.

  • Amount for ₹40,000/- in amount column.

  • Narration just below the Security Deposit for Rent A/c in Particulars column.

  • Folio numbers after entering the transaction into their respective Ledger Accounts. 

Security Deposit for Rent Payment Entry in Bank Book - R S Food Products

Entry in General Ledger Book

Ledger Account of : Security Deposit for Rent A/c.

Write :

  • Date of transaction in Date Column.

  • Indian Bank SB A/c No-6350 using prefix 'To' in Particulars column.

  • Amount of Security Deposit for ₹40,000/- in Debit Amount column.

  • Narration just below the Indian Bank SB A/c No-6350 in Particulars column

  • Folio numbers after entering the transaction into the respective Ledger Accounts.

Security Deposit for Rent A/c - Ledger Account - R S Food Products

Now the transaction recording phase is complete.

In case of Digital/Electronic mode of Book Keeping

Let's know about the procedure to pass the above mentioned Accounting Entry using Accounting Software TallyPrime.

  • Open TallyPrime.

  • Press 'V' or click on 'Vouchers' available on the Gateway of Tally Screen.

Security Deposit Payment voucher Entry-Trading Proprietorship Business - R S Food Products.

  • Press 'F5' or click on 'F5:Payment' at the right hand side Menu Bar.

  • Press 'F2' or click on 'F2:Date' at the right hand side Menu Bar to enter Voucher Date.

  • Type the Ledger Account 'Security Deposit for Rent A/c' where 'By/Cr' shows. 

TallyPrime-List of Ledger Accounts on voucher entry

  •  If 'Security Deposit for Rent A/c' is not available in the 'List of Ledger Accounts', press 'Alt+C' without returning from the Voucher Entry Screen.

  • Fill 'Security Deposit for Rent A/c' under group 'Loans & Advances (Assets)' with other details.

  • Press 'Enter/Y' to accept.

TallyPrime-Security Deposit for Rent A/c Ledger creation during Voucher Entry

  • Type/Write Security Deposit for Rent A/c amount in Debit column for ₹40,000/-.

  • Press 'Enter'.

  • Type, select and Press 'Enter' on Indian Bank SB A/c No-6350 for ₹40,000/-.
TallyPrime-Security Deposit for Rent Payment Voucher Entry
  • Enter Bank Allocations for Indian Bank SB A/c No-6350.

TallyPrime-Bank Allocations for Indian Bank SB A/c

Write Narration for this transaction and press 'Yes/Enter' to Accept.

TallyPrime-Security Deposit for Rent Payment voucher entry completed.

Now the Voucher Entry towards Payment of Security Deposit for Rent is Complete.

Place of these two Ledger Accounts mentioned above in Financial Record and Statements :

Security Deposit for Rent A/c

  • General Ledger

  • Balance Sheet - Assets Side - Current Assets - Deposits & Loans and Advances.

Indian Bank SB A/c No-6350

  • Bank Book

  • Balance Sheet - Assets side - Current Assets - Cash at Bank

Location: Cuttack, Odisha, India

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