Lesson on GL GL2<\/p>\n
( Dated21\/22 Apr 2016)
Good morning my young bankers.
Let us continue our example
Now Mr Q, R ,S deposited Rs2000; 3000 & 5000\/- in their SB Ac .As such Saving Bank Ledger will show as
AC of. P. Rs 500 Credit balance
Q Rs ,2000\/-. -”-
R Rs 3000\/ — “—-
S Rs 5000\/- —“——
Total Rs 10,500\/- ,,Cr balance.<\/p>\n
Now br GLBB or Balance Sheet ie Day Book will show as
GLBB as at………
Liabilities | Assets
Savings Dep 10,500| Cash. 10,500\/-
TOTAL. 10,500| Total 10,500\/-
————-+—————-+———————–
Thus for every cash deposit in Savings ac,Savings Deposit in GL and GLBB will grow.
Similar will be the thing if cash deposit is accepted in Current account and Fixed deposit ac in Main Ledger then in General Ledger and in GLBB
After few days the GLBB will look<\/p>\n
GLBB as at………..
Liabilities. Assets<\/p>\n
Saving Dep10.10 lac |Cash45,50 lac
Current dep20.40 lac|
FD. 15.00 lac|
—-++++——-_——-+++++——————
Total. 45.50 lac| 45.50lac
—————++\u00b1—–++++++————-+++
Suppose Mr X has given a cheque for Rs5 lac from his CA for payment. The accounts affected will be
CA of X in CA ledger; GL ac of Current Dep and Cash and hence change in GLBB
Dr X ac in CA ledger* by Rs5lac
Cr Cash ac# Rs5 lac
* Since AC of X is a Personal ac and he has recd money the principal no 1 is applied ie Debit the receiver.
# Cash will go out and Cash ac is a Real ac as such using principal no ,2 Credit the giver
Cash ac
Dr. | Cr. | Balance |
Opening bal…………. Dr Rs45.50 lac
By cash pay to X| 5 lac| Dr 40.50lac<\/p>\n
Personal ac of x in CA ledger
Openings bal |………..|Rs7.50lac Cr
To cash pay.5lac|…. |Rs2.50lac Cr<\/p>\n
GL ac Cash
Opg…………………… Cr45.50 lac
By cash 5lac| Cr40.50la<\/p>\n
GL ac CA Depos ac
Opg …………………..| Dr.20.50
By cash to X.| 5lac |… Dr15.50lac<\/p>\n
GLBB as at……..<\/p>\n
Liabilities. | Assets
SB Dep 10.00 | Cash ac 40.50
CA Dep. 15.50. |
FD Dep. 15.00 |<\/p>\n
TOTAL. 40.50| Total. 40.50
———–++————–+————————-
Thus individual accounts, the deposit ac and GL changes as different transactions are entered.
Now this Cash holding is huge hence we deposit the cash with SBI where we are having a Current ac.
In our books this ac is named as SBI account.Since it is equal to Cash the SBI ac in our books is a Real account.
Cash remitted to SBI is say Rs20 lac.
The acs affected are Cash and SBI ac both are Real ACS hence apply principal (1)
Dr SBI ac 20 lac*
Cr Cash ac20 lac#
* Debited since SBI has recd the mony and Cash ac is credited as Cash has gone out
Thus Asset side will look
Liabilities | Assets
| Cash on hand 20.50
| SBI.ac 20.00
Total. 40.50 | Total. 40.50
———————————————<\/p>\n
As a banker we enter ‘Three types of Transactions with Customers,Internal and with other Banks our outsiders.
1 Cash Transactions:-
Cash receipt and payments
2 Transfer Transactions
3 Clearing Transactions (with other banks)
We have already discussed Cash Transactions.
Now let us understand Transfer transactions.
SB Customer A has issued a cheque for Rs5 lac to SB Customer B.
Thus. A has to pay cash to B thru bank.The bank Debits A ‘s account and Credits B’s ac.This in fact can be described in two steps
i) Debit A’s account Rs 5 lac
Credit Cash account Rs5 lac
ii) Debit Cash ac Rs 5 lac
Credit B’s account Rs 5 lac
Applying principal of Personal accounts to A& B accounts ;Cash is a real account.
The above transactions have no effect on change in Savings Deposit
as there is equal Credit and Debit.
Another example of Transfer transaction.
Current depositor H gives a cheque fvg Savings Dep holder J for Rs2 lacs
The entries will be
Dr CA of H Rs2 lacs(debit the giver)
Cr SB ofJ Rs2 lac(credit the receiv)
This transaction will effect Individual CD and SB Dep acs and Total heads of CD ,SB dep.<\/p>\n
The GLBB or Day Book will look as
As at…………..
Liabilities. | Assets
SB Dep. 8.00 Cash on 20.50
CD. 17.50| CashSBI.20.00
FD. 15.00|
———————————————-
Total. 40.50|Total. 40.50
—————————————————
3 CLEARING Transactions
The banking system has several banks and may be several branches in one city.Similarly there are several customers with each branch.To understand the concept let us assume that there are 4 banks BOB, BOI SBI, KMB in a city with one branch each.All banks maintain CA with SBI.
At SBI there is Clearing House to settle the interbank transaction and all are members of Clearing House.
We suppose that the customers of each bank has deposited the cheques drawn by their customers
and following summary is given.<\/p>\n
i)SBI Customers deposited
6 cheques ; 2 on BOB Rs.2 lacs; . 3Ch on BOI Rs3lacs. ,& 1 Cheque on KMB for Rs.7 lac
SBI has to receive Rs.12 lacs
ii) BOB customers deposited
4Cheques ; On SBI 2 CH Rs.4 lac and On BOI Rs.3 lac
Thus BOB has to receive Rs7 lacs
iii)BOI customers deposited 5 cheques on SBI for Rs 8 lacs
BoI has to receive Rs 8 lacs
IV) KMB customers deposited 2 cheques on SBI Rs1 lac and 4 cheques on BOB for Rs5 lacs.
Thus KMB has to receive Rs6lac.
In nut shell all banks have to receive certain amount and has to pay also to other banks.
The situation will become very complex if more banks and branches are added.
It is not continent to send cheques to different banks\/branches.This problem is solved by Clearing House.
At SBI the 4 bankers will meet and exchange the cheques on each other.A schedule of settlement will be given by each bank to SBI and SBI will pass a single entry of Credit or Debit for the Net amount.
SBI Schedule
On Us.(To pay)| By Us (To receive)
BOB. 4lac | 2lac
BOI. 8 | 3
KMB. 1 | 7<\/p>\n
Total. 13. | 12
SBI has to pay a net amount Rs1lac<\/p>\n
BOB
SBI. 2 | 4
BOI. 0 | 3
KMB. 5 | 0<\/p>\n
Total. 7. | 7
BOB Net = 0<\/p>\n
BOI
SBI. 3 | 8
BOB. 3 | 0
KMB. 0 | 0
Total. 6. | 8
Net. Receipt 2 lac<\/p>\n
KMB
SBI. 7 | 1
BOB. 0 | 5
BOI. 0 | 0
Total. 7 | 6
Net pay 1 lac<\/p>\n
SBI will pass a single entry
Dr self (A\/c holders ) Rs1 lac
Dr CA ac of KMB. Rs1 lac
Cr CA ac of BOI. Rs 2 lac
All of you are requested to study the above transactions at least twice to have a clear understanding.
Previously there used to be Physical movement of cheques at Clearing House as stated above.
Now the service department of each bank tackles this.There is no movement of physical cheques but only Image of cheques are sent on clearing bank.
Let us close the topic.
Thank u and good night my Young FB friends I want your comments.
May I continue or conclude?<\/p>\n
Waman Gokhale (11pm 21\/4\/16)
7350901500
waman.gokhale@gmail.com<\/p>\n","protected":false},"excerpt":{"rendered":"
Lesson on GL GL2 ( Dated21\/22 Apr 2016)Good morning my young bankers.Let us continue our exampleNow Mr Q, R ,S deposited Rs2000; 3000 & 5000\/- in their SB Ac .As such Saving Bank Ledger will show as AC of. P. Rs 500 Credit balanceQ Rs ,2000\/-. -”-R Rs 3000\/ — “—-S Rs 5000\/- —“——Total Rs…<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":1165,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-1355","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/pages\/1355","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1355"}],"version-history":[{"count":1,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/pages\/1355\/revisions"}],"predecessor-version":[{"id":1356,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/pages\/1355\/revisions\/1356"}],"up":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/pages\/1165"}],"wp:attachment":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1355"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}