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Cash credit bank account maintained and how to make entries like debit entries

uday rao (22 Points)

20 February 2023

if a company is handling all the transaction in cash credit bank account ...what should an accountant do to create an account in tally and pass debit entries. means cc A/c is debit balance account in bank accounts and in books of accounts how can i show those debit entries in tally..

thank u in advance.

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6 Replies

sabyasachi mukherjee (26083 Points)
Replied 20 February 2023

It's normal entries.Only bank reconciliation will be different.

prasad Nilugal ( GST Practitioner & Accounts ) (14171 Points)
Replied 20 February 2023

Cash credit A/c , is sanctioned as per your stock in hand an debtors, It is just like Over Draft facility given by the Bank. also there is certain limit for CC A/c to withdraw money , you have to give details of Debtors, stock , creditor etc. monthly.
So when you pay from CC A/c , your balance in CC Account will increase and when you Deposit in the same CC Account balance will decrease. up to certain limit you Can withdraw ( sanctioned by the Bank)

Pass similar entries of payment and receipt.

Expenses A/c Dr
To Cash credit A/c Cr
( payment through Cash credit account)
here Your CC Account will increase

Cash Credit. A/c Dr
To Income. A/c Cr
( Income received deposited in CC account)here your CC Account will Decrease

In fact CC account is lability , when over withdrawn from Bank .

1 Like

uday rao (22 Points)
Replied 20 February 2023

how is the reconciliation is different in cc account

prasad Nilugal ( GST Practitioner & Accounts ) (14171 Points)
Replied 20 February 2023

See , in reconciliation when you Deposit a cheque received from party on 31st or 30 th of month, you will reduce your balance in your CC account, however balance in Bank will remain same, because cheque will be cleared only in the next month, so you have to increase balance in CC account at time of reconciliation .
Similarly in Case you make payment on 31st your CC account balance will increase, in Bank CC account balance remain same, because cheque will clear in the next month, so you have to reduce balance in your books.
Also any interest charged, that you have to pass debit entries in you books as per the bank statement..
you know we do Bank reconciliation on 31st or 30 th every month.