In bank statement, cash deposited is shown as _____.
Last updated Jun 24, 2026
Correct Answer:
Option B —
credit
Why is it a Credit?
This is often confusing because, in your own accounting books, cash is an asset, and increasing it would be a Debit. However, a bank statement is prepared from the bank's perspective:
The Bank's Liability: When you deposit money, the bank now owes that money back to you. In accounting, an increase in a liability is a Credit.
Your Perspective vs. Bank's Perspective:
In your Ledger: You Debit the Bank account (Asset increases).
In the Bank's Ledger: They Credit your account (Liability to you increases).
Understanding the Options
A) Debit: In a bank statement, a debit represents a withdrawal or a deduction (like an ATM withdrawal or a bank fee).
C) Expense: While a withdrawal might be for an expense, the entry itself is a transaction type, not the expense category.
D) Profit: Depositing your own money is not a profit; it is simply moving an asset (Cash) into another form (Bank Balance).
Answer verified by Quintessence Classes faculty — Karan Nagar, Srinagar.
