What Is Account Current?
Current account is one of the management methods for commercial enterprises to open an account in a bank. Banks and enterprises each use only one method to account for deposits and loans. On the bank side, corporate deposits and loans are registered in one account, and the company's loan limit can be grasped at any time. As long as it does not exceed the approved loan limit, the bank can pay or transfer according to relevant vouchers; And loans are also registered in one account. There is no need to go through the loan and repayment procedures one by one. The enterprise purchases goods or pays various amounts, increasing the amount of bank borrowing. The sales income of the enterprise is sent to the bank, which means that the bank loan is returned. It is often referred to as "receipt, loan and repay." Enterprises using this method of accounting only open bank borrowing accounts in the general ledger. When paying or withdrawing cash, it is recorded in the "Increase" column of the account, and when income or deposit is made, it is recorded in the "Decrease" column of the account, and the balance reflects the actual amount of bank borrowings. If the balance is negative, it means bank deposits. When preparing the accounting statements at the end of the month, it should be filled in the "Bank Deposits" item in the "Funds Table". This method is generally applicable to enterprises with less own funds and a larger proportion of bank borrowings in liquidity. This method is mostly used by the first and second-tier wholesale enterprises in the commercial sector, and some third-tier wholesale enterprises and individual retail enterprises have also adopted this method. Its advantages can simplify the accounting procedures for deposits and loans, and improve work efficiency. As this method is not convenient for banks to grasp the status of corporate deposits and borrowings separately, it has been cancelled and the deposit-and-lending method is adopted instead. [1]
Current account
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- Current account is one of the management methods for commercial enterprises to open an account in a bank. Banks and enterprises each use only one method to account for deposits and loans. On the bank side, corporate deposits and loans are registered in one account, and the company's loan limit can be grasped at any time. As long as it does not exceed the approved loan limit, the bank can pay or transfer according to relevant vouchers; And loans are also registered in one account. There is no need to go through the loan and repayment procedures one by one. The enterprise purchases goods or pays various amounts, increasing the amount of bank borrowing. The sales income of the enterprise is sent to the bank, which means that the bank loan is returned. It is often referred to as "receipt, loan and repay." Enterprises using this method of accounting only open bank borrowing accounts in the general ledger. When paying or withdrawing cash, it is recorded in the "Increase" column of the account, and when income or deposit is made, it is recorded in the "Decrease" column of the account, and the balance reflects the actual amount of bank borrowings. If the balance is negative, it means bank deposits. When preparing the accounting statements at the end of the month, it should be filled in the "Bank Deposits" item in the "Funds Table". This method is generally applicable to enterprises with less own funds and a larger proportion of bank borrowings in liquidity. This method is mostly used by the first and second-tier wholesale enterprises in the commercial sector, and some third-tier wholesale enterprises and individual retail enterprises have also adopted this method. Its advantages can simplify the accounting procedures for deposits and loans, and improve work efficiency. As this method is not convenient for banks to grasp the status of corporate deposits and borrowings separately, it has been cancelled and the deposit-and-lending method is adopted instead. [1]