The entry in a firm's accounting records for the monthly service charge by the bank noted on the bank statement would include:

Question

Quizplus · Accepted Answer

The monthly service charge by the bank is an expense incurred by the firm, therefore a debit is required to the Bank Fees Expense account. As this expense is paid in cash, there is reduction in the firm's cash which is reflected by the credit to the Cash account. Therefore, the entry in the firm's accounting records for the monthly service charge by the bank noted on the bank statement would include a debit to Bank Fees Expense and a credit to Cash.

The Entry in a Firm's Accounting Records for the Monthly