All 26 Bank Reconciliation questions
More in Bank Reconciliation
How do bank errors feature in a reconciliation? How do you reconcile when starting from the cash book balance instead of the statement? What is the correct order: update the cash book first or reconcile the statement first? How does electronic/online banking change the reconciliation process? How do you deal with stale or cancelled cheques in a reconciliation? How does the bank reconciliation interact with the financial statements? How does the timing of banking affect month-end reconciliation? How do you handle a customer's standing order paid into the wrong period? How would a fraudulent unrecorded withdrawal be detected in reconciliation?
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Bookkeeping › Bank Reconciliation

How do you treat interest received and charged in the reconciliation?

Intermediate

Answer

Both usually appear on the bank statement first. Interest received is a cash book receipt (debit bank, credit interest income); interest/overdraft charges are a cash book payment (credit bank, debit interest expense). After posting them to the cash book, only timing differences remain to reconcile.
Interest received 15: Dr Bank 15; Cr Interest Income 15.
Real-world example Bank interest earned and overdraft charges are entered into the cash book from the statement before reconciling.

Common follow-ups: Which side records interest received? | Why update the cash book for these?

Cash Book & Petty Cash Correcting Errors Bank Reconciliation
All 26 Bank Reconciliation questions