Hello, I'm new to this and I'm in need of some help.
Of course all of this will be easy for you guys but I'm really struggiling with it.
I'm doing my level 1 bookkeeping and I'm on Cash books. I understand the Debit and Credit bits and bobs and I've done some cash books already in class.
Usually the start of the month will say something like 'Balances brought forward from last month are £234.00 cash, £8.979.00 bank' So I know that goes into the credit side but now I'm faced with this scenario: 'Balances brought down from last month are £589.00 cash and there was a bank overdraft of £2570.00'
WHERE do I put this bank overdraft? Does this mean that the previous month was overdrawn and in debt so I need to put it in the Credit side?
Please if someone can help, I've looked in my books but I'm not making sense of it all.
I really appreciate the help, I'm getting rather upset over it - doesn't help that I'm tired :(
Usually the start of the month will say something like 'Balances brought forward from last month are £234.00 cash, £8.979.00 bank'
So I know that goes into the credit side.....
I assume that you meant debit side for the usual positive balances brought forward. As for the overdraft, you're right that this means that the prior month was overdrawn and that the brought forward balance would be shown as a credit balance.
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Pearce & Co - Chartered Accountant and Chartered Tax Adviser
haha - yes I meant Debit lol, sorry. I have to think slowly while dealing with Debit and Credit and I was in a rush when writing this lol.
Thank you so so much! One other thing if that's ok.....another question stated 'A £200 withdrawal from the bank to put into the business' again, does this come out of the Credit side as it's money coming out. I found this question confusing as it's money coming out of the bank but also money going into the business - is that even making sense?
.....another question stated 'A £200 withdrawal from the bank to put into the business' again, does this come out of the Credit side as it's money coming out. I found this question confusing as it's money coming out of the bank but also money going into the business - is that even making sense?
I've put it in the credit side.
Yes, If the £200 comes out of the business bank account, then it should be a credit. If the money is going to be paid back into the business, then this repayment will debit the business bank account.
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Pearce & Co - Chartered Accountant and Chartered Tax Adviser
