Answer / prem

bank charges A/c dr ****
To bank A/c ****
(here the cash is not going through our hands,the banker is
going to deduct it from our account,so we need to less the
bank balance by crediting it,and by debiting bank charges.)

bank A/c dr ****
To interest A/c ****
(we are not receiving interest in form of cash from the
banker,simply he is going to credit the interest part to
our account.we are going to debit our bank balance to the
extent of interest part.we should not treat it as cash
receipt unless and until we realised it)

Answer / amjad khan

KHAN TO KHAN

BANK CHARGES IS AN INDIRECT EXP WHICH IS A NOMINAL A/C

BANK CHARGES A/C DR 100
TO BANK A/C 100

YOUR SECOND ENTRY INTEREST RECEIVED IS AN INCOME

BANK A/C DR 100
TO INTEREST REC A/C 100

PLEASE REMEMBER ME IN YOUR PRAYERS

Answer / supriya shetty

1. The entry for bank charges debited to the account:

Bank charges/Interest account dr.
To Cash/Bank account cr.

2. The entry for bank charges credited to the account:

Cash/Bank account dr.
To Bank Interest account cr.

The Bank charges or Bank Interest account will be under
bank accounts. As the interest debited or credited is in
bank, and not realised.

Answer / dhanashree

Hi, mistaken in the last answer it should be

Bank Charges A/C...Dr
To Bank A/C
(Being bank charges charged by bank)

Bank A/C....Dr
To Interest received A/C
(being Interest received- on deposit)
In case the interest is pais the entry will be
Interest paid A/C....Dr
To Bank A/C
(Being Interest paid)

Answer / khan

Hi Mr.Cartik,

Thanks for your reply, but why dont we take instead of
abouve,

Bank Charges A/c Dr xxx
To Bank xxx

Rec. Interest A/c Dr xxx
To Bank xxx

means i want to clear my doubt, also i need clarification
how it is affecting to Cash A/c.

Thanks,
Khan

Answer / purushotham

Bank charges a/c dr 100
To bank a/c 100
bank charges comes under nominal a/c
Bank a/c dr
To interest a/c
interest also comes under nominal a/c

Answer / dhanashree

Hi, Since the bank charges are directly debited from our
account, we will reduce the bank balance (by debiting bank
account) remember creditin Bank account means cash is
adding into your account. Journal entry should be:
Bank A/C.....Dr
To Bank Charges A/C
(Being bank charges charged by bank)

In case of Interest is received on deposit etc. We should
treat it as income and journal entry should be:

Cash A/C....Dr
To Interest received A/C
(Being interest received)

Answer / vishnu murthy.p

Bank charges a/c-----dr 100
To Cash/Bank ------A/c 100

(Being Bank charges is paid)

Bank a/c-----dr xxxx
To Interest --------A/c xxxx

(Being Interest received from bank)

Answer / narayan dey

bank charges a/c dr 100
to bank a/c 100
(being the amount reduce by bank)

It comes under Nominal A/C

Cash A/c dr
to bank A/c
(being the amount received from bank)

Answer / aarohi malhotra

Since "bank charges" are an expense because we have to pay it indirectly from our bank A/c.....therefore expense is always a debit and the bank indirectly becomes the giver since bank itself has to deduct the money from our A/c and has to pay it for the charges so it is credited..
Therefore we conclude that the first entry should be as follows :-->>
Bank charges A/c -------------- Dr. 100
To Bank A/c. 100
(Being, bank charges paid)

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