Hello,
We are paying some creditors through multicity chaques. Charges are borne by the creditor. Accounting entry made in our books is:
Sundry Creditor A/c ....Dr
To Bank A/c
To Bank charges
Is treatment for bank charges correct?
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Bank Charges
Replies (5)
if you can create bank charges reimbursed account, than it would be better.
because of this you can classify the charges paid by you to the bank and received from customer- my opinion
d of classification.its not an incorrect entry but it is also not adviced by many.since if at all,in future,any circumstance arise which requires classification of bank charges reimbursed,it wud require unnecessary additional efforts,so its better to adopt what 'future ca' had recommended in regard of classification.
Bank charges Reimbursement A/c will be opened under "Other Income" or "Bank Charges".. Which will be better
it wud b better under bank charges as even if it is not set off, bank charges wud be showing correct figure.
thanx keshav..
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