Expenses & income · Level: Basics
Journal entry: Bank charges
Bank fees are an expense of handling money, booked as Bank charges.
Worked example
The bank charges us £15.00 in account fees.
Correct journal entry
Bank charges £15.00 / Bank £15.00
Debit
Bank charges£15.00
Credit
Bank£15.00
Why?
- Bank charges: expense incurred → debit
- Bank: asset decreases → credit
Typical mistake
Booking the fees as negative interest income.
Your turn
Three problems on exactly this case, with different numbers. Amounts work with or without separators, e.g. 2,400.00 or 2400.
Task 1 of 3Expenses & income
Transaction
The bank charges us £70.00 in account fees.
Enter as
Debit
Assets up · expenses · liabilities down
Total debit£0.00
Credit
Liabilities up · income · assets down
Total credit£0.00
Frequently asked questions
What is the journal entry for bank charges?
Example: Bank charges £15.00 / Bank £15.00.
How do I recognise this case?
Bank fees are an expense of handling money, booked as Bank charges.
What is the typical mistake?
Booking the fees as negative interest income.