Cash Entry: if cash deposited at bank by a customer

Page no : 2

Ajay K (Accounts/Finance & CA Final Student ) (200 Points)
Replied 31 July 2010

Dear all 1st entry is correct bcoz we didn't recvd. cash physically then why we will dr. cash so,we have to take direct tranasaction simply customer direct dep.cash then cash dr. to customer.

Ajay K (Accounts/Finance & CA Final Student ) (200 Points)
Replied 31 July 2010

sorry Bank a/c dr.

To customer a/c

Dheeraj Sondhiya (CA- IPCC) (184 Points)
Replied 31 July 2010

No friend ( Rajendra Nath) your entry is wrong it is like this...

On 3rd April the entry is

Cheque-in-hand a/c Dr.

To Debtors A/c

On 5th April when u deposited the cheque in bank the entry is

Bank A/c Dr.

To Cheque-in-hand a/c

Pkala (CA Final (New Course)) (211 Points)
Replied 31 July 2010

I agree with Dheeraj Sondhiya, he is right

CA Rahul Jain (Job) (148 Points)
Replied 31 July 2010

AGREE WITH DHEERAJ

vikas (bxy) (87 Points)
Replied 31 July 2010

if u want to work as well professional, always follow journal entry rule-which will simplfy to know the report as required by you.

if you directly credit customer a/c with bank then at the year end, you will not able to see the report-how much cash/cheque received by customer.

first entry is also correct but not good as compared to second entry.

Anil Kumar (Employee) (33 Points)
Replied 31 July 2010

Dear Mr. DVD

I am agree with Nishant Jain and transaction will be supported by deposit slip only for both like company and client.

Mayank (Sr.Accountant) (152 Points)
Replied 31 July 2010

Hi. DVD

The first entry is correct because there is no cash receival in the hands of the company.

and there is no restriction for depositing cash by a third party in company's account.

so u can make the first entry and i also apply the same.

byeeeeeeeeeeeeeeee

CA Anil Jain (Chartered Accountant) (696 Points)
Replied 31 July 2010

Although 1st entry is correct but it should be kept in mind if it would have been the entry of cash payment excedding Rs. 20,000 instead of cash receipt then direct entry through bank not advisable as it would attracts disallowance of expenditure alngwith the penalty of concealment of transaction.

CA Lalit Kandoi (Chartered accountant) (1053 Points)
Replied 31 July 2010

first entry is right

CA NEHA SHARMA (CA) (81 Points)
Replied 31 July 2010

First entry is right because no cash is actually recd by the company & directly recd in bank from customer. Hence no cash inflow should be reflected in the books at the time of receipt.