Question

The bank statement reports a credit transfer of Rs.$4000$ from a customer. Accounting entries for this is _____________________.

• A. A debit in the cash account and a credit the account of the debtor concerned
• B. A debit in the bank account and a credit in the cash account
• C. A debit in the bank account and a credit in the account of the customer concerned
• D. A debit in the account of the debtor concerned and a credit in the bank account

Answer 1

The correct option is C A debit in the bank account and a credit in the account of the customer concerned

As per double entry system of accounting, every transaction affects two account. In the given transaction, Bank and customer account are affected. Bank account is a real account and customer account is a personal account.

Following the rule of real account and personal account, below entry will be passed:

Bank A/c Dr. 4000

To Customer A/c 4000