Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 25 - No. 47)
If a business takes a loan and deposits the proceeds into its bank account, how will this affect the cash book?
Debit the cash column, credit the bank column.
Credit the cash column, debit the bank column.
Debit the bank column, credit the loan account (in general ledger).
Credit the bank column, debit the loan account (in general ledger).
Explanation
The bank account balance increases and is recorded on the debit side, while the loan account increases and is recorded on the credit side.
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