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Bank charges

Bank charges are amounts charged by a bank for services such as account administration, transfers or overdraft facilities. They usually create an expense and reduce the business’s bank asset, or increase its overdraft liability. In a bank reconciliation, charges appearing first on the bank statement must be entered in the cash book before reconciling the updated balance.

Worked example

The statement shows a $15 fee absent from the cash book: debit bank charges expense $15 and credit bank $15.

Common mistake

Do not leave a bank fee as a timing difference after updating the cash book: it is an unrecorded transaction.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA F1 Direct July 2027–August 2028
ACCA F2 Supporting July 2027–August 2028
ACCA FA Direct September 2026–June 2027
ACCA K1 Direct July 2027–August 2028
CIMA BA3 Direct Official assessment-window verification pending
FIA FFA Direct September 2026–June 2027

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