Journal entry for cash deposited in the bank has become redundant because of cashless transactions.
However, small businesses still accept cash in their bank accounts.
Journal entry of cash deposited in a bank account as follows:
Debit – Bank account
Credit – Cash account
Explanation of cash deposited in a bank journal entry.
As a rule of thumb, we debit the asset account whenever something comes into the asset account. And, when anything goes out from the asset account, we credit the asset account.
In the above entry, both Bank and Cash are asset accounts. Transferring from one asset account to another will create a contra effect. It means one asset account is debited (Bank), and another asset account is credited (cash).