All 26 Cash Book & Petty Cash questions
More in Cash Book & Petty Cash
How is the petty cash book reimbursed and posted? What is a contra entry in the cash book? How do discounts allowed and received appear in the three-column cash book? What internal controls apply to cash and petty cash handling? Why might the petty cash book not balance and how do you investigate? How is the receipt of capital or a loan recorded in the cash book? How are drawings recorded in the cash book? What is the treatment of cash discounts versus the cash received in the cash book? How is petty cash treated at the period end for the financial statements? How do you record dishonoured (bounced) cheques in the cash book?
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Bookkeeping › Cash Book & Petty Cash

What entries arise from bank charges, interest, and standing orders in the cash book?

Intermediate

Answer

These items often appear first on the bank statement and must be entered in the cash book: bank charges and interest paid are credited (payments) and debited to expense; interest received is debited (receipt) and credited to income; standing orders/direct debits are credited as payments to the relevant expense or payable. They're picked up during bank reconciliation.
Bank charges 30: Cr Bank (cash book) 30; Dr Bank Charges 30
Interest received 12: Dr Bank 12; Cr Interest Income 12
Real-world example Bank charges shown only on the statement are entered into the cash book so it agrees before reconciliation.

Common follow-ups: Why update the cash book for statement-only items? | Which side records bank charges?

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