Banking Transaction Financial Accounting Entries

Direct Debit In Bank

26) Direct debit instructions will be given to the bank for example, LC payments or certain bank charges are directly debited in the Bank Statement. In this case accounting entry is passed only after the entry is passed in the bank statement.

Vendor / Expense Account Debit

Bank clearing account Credit

Direct Credit In Bank

27) Customer receipts are sometimes directly credited in Bank. E.g. export receipts. In this scenario accounting entry is passed only at the time of bank statement entry. The following accounting entry is passed

Bank clearing account Debit
Customer account Credit

Main Bank A/c Debit

Bank Clearing A/c Credit

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