Generally Banks charge some amount for providing service to their customers on different heads like,
Cash Deposit Charges
Cheque Clearing Charges
ATM/Debit Card Charges
Minimum Balance non maintenance Charges etc.
Now let's discuss with example what will be the Journal Entry and Ledger Posting when Service charges are deducted by the Bank.
The following Ledger Accounts will be affected.
Bank Charges Account shows Debit effect.
Bank Account shows Credit effect.
Journal Entry
Ledger Posting
In Bank Charges Account.
In Bank Account
Example :
In the Books of M/s.Trimurthy Traders, Axis Bank charged ₹125/- to Axis Bank Current Account for Cheque clearing charges on date 02/08/2021
Pass necessary Journal Entry and Post them into their respective Ledger Accounts for the above transaction.
In the above example
Debit Ledger is :
- Bank Charges Account
Credit Ledger is :
- Axis Bank Current Account
Journal Entry
Ledger Posting
In Bank Charges Account.
In Axis Bank Current Account
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