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Bank statement entry

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how to enter bank transaction of a proprietor for the transaction which is not related with the business
Replies (5)
Personal transactions should not be recorded in the books of the business. instead they should be recorded in proprietors personal finance records
What if personal Nature entries done through business account
Any withdrawal from business bank account for personal purpose, will be treated as Drawings and will debited to Capital account.

Drawings A/c Dr
To Bank A/c Cr
( withdraw for personal purpose)

Drawings transfer to Capital account

Capital A/c Dr
To Drawings A/c Cr
( transfer entry)

Single bank account for both personal and business use, it's crucial to differentiate transactions.

To record personal transactions, categorize them as "Personal Withdrawals" or "Personal Expenses" in a separate section within financial records. Avoid mixing personal and business expenses and maintain clear separation. Record personal income as "Personal Deposits." Regularly reconcile the account. 

All the amounts will be treated as drawings.


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