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ctcLink Accounting Manual | Bank Analysis Earnings Bank Analysis Earnings

Through the process of compensating balances, some colleges receive interest earnings that are intended to offset banking charges. Though it is not mandated, it is proper to recognize those earnings and expenditures in the accounting records of the college.

Colleges choosing to record these transactions should establish an account within a fund that allows revenues and expenditures (e.g.  Fund 148). Each month as revenues and expenditures are calculated by the bank, the college records revenue (4120010 – Interest Income) and expenditures (5050070 - Bank Fees). The entry will result in a debit or credit to cash (1000070 – Cash in Bank).

Illustrative Entries

Bank Interest & Charges

Fund Class Dept Method Acct DR Acct CR Amount ($)
148 0xx ddddd AR Direct Journal 1000070 4120010 50.00
148 0xx ddddd AP Voucher 5050070 1000070 100.00 Negative Cash Balance Interest Charges <<  >>  40.35 Inventories and Prepaid Expenses

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Last Modified: 3/12/24, 9:23 AM

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