ctcLink Accounting Manual | 40.30.20.7 Bank Analysis Earnings
40.30.20.7 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 |
40.30.20.6 Negative Cash Balance Interest Charges << 40.30.20.7 >> 40.35 Inventories and Prepaid Expenses
