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
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| 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 |
