Question

What is the journal entry for cash withdrew from bank Rs 4750 for office use?

Options:
A) Debit: Office Supplies Expense, Credit: Cash
B) Debit: Cash, Credit: Office Supplies Expense
C) Debit: Cash, Credit: Office Supplies
D) Debit: Office Supplies, Credit: Cash

Answer 1

The correct journal entry for withdrawing cash from the bank for office use is to debit Cash and credit Office Supplies, reflecting an increase in both cash on hand and office supply expense.

Step-by-step explanation:

The journal entry for cash withdrawn from the bank amounting to Rs 4,750 for office use would be recorded as follows:

Option C)

• Debit: Cash - Rs 4,750
• Credit: Office Supplies - Rs 4,750

When cash is withdrawn from the bank for office use, it increases the asset 'Cash' while simultaneously increasing the expense 'Office Supplies' since the cash is being used to purchase supplies for the office. Therefore, we debit the Cash account, as cash is coming into the business, and we credit the Office Supplies account, because that's the purpose for which the cash was withdrawn. It's worth noting that 'Office Supplies Expense' could be the account credited if the supplies are being expensed immediately. The answer would then be Option B).