Project for Practice - Opening of Current Account in Bank - Date:01/04/2021 - Trading Business - Prorietorship Firm

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

Opened a Current Account in HDFC Bank Ltd bearing Current Account No-00000005134 by depositing Cash for ₹25000/-.

Practical procedure to record the above transaction.

Let's us go with a step by step systematic procedure to record this transaction in the 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 :

HDFC Bank CA No-5134

Credit Ledger is :

Cash A/c

Step - 2

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

Write a Bank Deposit Slip/Pay-in-Slip for ₹25000/- as prescribed by HDFC Bank.

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

Recording and posting of transaction from the acknowledgement/Deposit slip of Current Account opened with HDFC Bank Ltd. into their respective Books of Account and Ledger Accounts.

Related Books of Account and Ledger Accounts for this transaction.

Journal Book/Journal Register
Cash Book : Cash A/c
Bank Book : HDFC Bank CA No-5134

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.
HDFC Bank CA No-5134 in Particulars column.
'Dr.' at right hand side of HDFC Bank CA No-5134 in Particulars column.
Cash Deposit amount in Debit amount column for ₹25,000/-.
Cash A/c just below the HDFC Bank CA No-5134 in Particulars column using prefix word 'To'.
Cash Deposit amount for ₹25,000/- in Credit Amount column.
Narration just below the Cash A/c in Particulars column.
Folio numbers after entering the transaction into their respective Ledger Accounts.

Current Account opened with Bank by Cash Deposit - Journal Entry

Entry in Cash Book as mentioned in the format below :

Write on the Payments Side as mentioned below.

Date of transaction in Date Column.
HDFC Bank CA No-5134 using prefix 'By' in Particulars column.
Amount for ₹25,000/- in amount column.
Narration just below the HDFC Bank CA No-5134 in Particulars column.
Folio numbers after entering the transaction into their respective Ledger Accounts.

Current Account opened with Bank by Cash Deposit - Entry in Cash Book

Entry in Bank Book(HDFC Bank CA No-5134) as mentioned in the format below :

Write on the Receipts Side as mentioned below.

Date of transaction in Date Column.
Cash A/c using prefix 'To' in Particulars column.
Amount for ₹25,000/- in amount column.
Narration just below to the Cash A/c in Particulars column.
Folio numbers after entering the transaction into their respective Ledger Accounts.

Opening of Current Account with Bank by Cash deposit - Entry in Bank Book/Bank Ledger

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

On Gateway of Tally Screen Press 'V'/Select and press 'Enter' on Vouchers/click on 'Vouchers'

Press 'F4' or click on 'F4:Contra' at the right hand side Menu Bar.
Press 'F2' or click on 'F2:Date' to enter the date of transaction.
Type/Select and Press 'Enter' on Cash A/c where 'To/Cr' shows.
Write ₹25,000/- in Credit column.

Create HDFC Bank CA No-5134 under group Bank Accounts by Pressing 'Alt+C' just right, where 'By/Dr' shows.
Because HDFC Bank CA No-5134 Ledger Account is a new Ledger Account and is not available in the List of Ledger Accounts.