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Let's view this from the Bank's point when it comes to CASH! For example, you deposit Cash in to your account, the bank credits your account (which is opposite of what a company would do), when you withdraw money from your account, the bank debits your account (again opposite of what company's do).

To try and explain this in simple terms. When a company (not a bank) receives money, it is the "company's" money, which they can use to pay debts, purchase equipment, etc. Therefore it's a Debit (asset) to the company.

When a bank receives money that is placed in "your" account, it's not THEIR money, it's "YOURS", making it a form of a liability, they have your money that they will have to pay you back upon request, so in perspective it is a type of debt to the bank.

When a bank loans you money, it becomes an asset for them (they will receive not only payments for the loan but any interest on the loan) which is part of a banks income.

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16y ago

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How do you calculate bank balance?

call the banks customer service and ask for your balance. Make sure all checks and debits have been taken out, if they have not, then subtract them from the balance the bank tells you. That number would be your balance


How are items that is reported as credits on the bank statement represent a additions made by the bank to the company's balances or b deductions made by the bank from the company's balance?

On the banks books a deposit by a customer is as asset of yours but the bank's liability to you. In accounting a liability is reflected as a credit. So your deposit, an increase to your balance, is reflected as a credit on the statement. Conversely a disbursement of funds by a customer is a debit on the statement, reducing the customers balance as well as reducing the banks liability to you . Hope that helps.


What is the direct entry method in banks?

The direct entry method in banks refers to a process that allows businesses or individuals to initiate electronic transactions directly into the banking system, bypassing traditional paper-based methods. This method is commonly used for payments like payroll, direct debits, and other bulk transactions, streamlining the process and reducing errors. It typically involves the use of software or online banking platforms to facilitate the entry and processing of these transactions efficiently.


How much education is required to be a CPA in a bank?

CPA's don't work in banks. They work at accounting firms. A bachelor's degree with 150 credits is required in most states. Delaware only requires an associate's degree though.


How do you write letter to the bank to facilitate SMS facility for account?

Following are the details you have to mention if bank do not have a pre-designed application form. 1. Your Name in Full 2. Address 3. Identity Card Number 4. Account Number 5. Phone Number 6. Preferred notifications (i.e All Credits/ All Debits/ Cheque Returns/ Standing Orders etc...) Please note that some banks introduce packages combining these notifications. If so, you need to mention which package you are referring to. 7. Signature (which you have given to your account) It is worth to mention that bank disclose your account information on your request. They do not responsible for any harm you may face due to it.

Related Questions

What is bulk posting in banking?

Bulk posting in banking involves posting a bunch of debits or credits at once, or in bulk, on particular days. Banks do this with just one posting.


How did deregulation lead to a decrease in the number of banks between 1980 and now?

Deregulation removed some of the controls on banks. Legislation in the 1980's, removing some of the control resulted in a decrease in the number of banks and an increase in the size of the remaining banks. It was more difficult for small banks to compete for market share.


What are general entry of loan in banks?

In banking, the general entry for a loan involves recording the transaction in the bank's accounting system. When a loan is issued, the bank debits the Loan Receivable account (an asset) and credits the Cash or Bank account (also an asset) to reflect the disbursement of funds. This entry captures the amount lent to the borrower, establishing the bank's right to receive repayment in the future. Additionally, when repayments are made, the bank would reverse this entry, reflecting the decrease in the loan receivable and an increase in cash.


A tool often used by the Federal Reserve to stimulate borrowing and spending is to?

decrease the discount rate to banks-decrease the discount rate to banks.(:


Would banks decrease or increase interest rates if they had less money to loan?

If banks had less money to loan they would increase their interest rates. This is because they would have to make the most profit off of the little money that they had to use. When banks have a lot of money to loan, interest rates are lower because they can still get a lot of interest even from the lower interest rates.


What can the Fed accomplish by raising or lowering the required reserve ratio?

If they lower the ratio, banks do not have to hold as much cash (which gains no interest), the banks will attempt to loan this money out and make money, this can stimulate investment. Increase or decrease in the money supply (APEX)


What is the relationship between inflation and ocr?

As the OCR increases it is highly likely that banks will increase their retail interest rates. As they do this borrowing will become relatively more expensive so there will be more incentive to save. So consumption a component of Aggregate demand will decrease causing aggregate demand to decrease which will than decrease Demand pull inflation


Can Canadian banks accept Iranian letter of credits?

It seems no bank can accept Irans credit letter


How the slr and crr influence the Indian business?

RBI lends to the commercial banks through its discount window to help the banks meet depositor's demands and reserve requirements. The interest rate the RBI charges the banks for this purpose is called bank rate. If the RBI wants to increase the liquidity and money supply in the market, it will decrease the bank rate and if it wants to reduce the liquidity and money supply in the system, it will increase the bank rate. As of 5 May, 2011 the bank rate was 6%.Cash Reserve Ratio (CRR): Every commercial bank has to keep certain minimum cash reserves with RBI. RBI can vary this rate between 3% and 15%. RBI uses this tool to increase or decrease the reserve requirement depending on whether it wants to affect a decrease or an increase in the money supply. An increase in Cash Reserve Ratio (CRR) will make it mandatory on the part of the banks to hold a large proportion of their deposits in the form of deposits with the RBI. This will reduce the size of their deposits and they will lend less. This will in turn decrease the money supply. The current rate is 6%.Statutory Liquidity Ratio (SLR): Apart from the CRR, banks are required to maintain liquid assets in the form of gold, cash and approved securities. Higher liquidity ratio forces commercial banks to maintain a larger proportion of their resources in liquid form and thus reduces their capacity to grant loans and advances, thus it is an anti-inflationary impact. A higher liquidity ratio diverts the bank funds from loans and advances to investment in government and approved securities.


Which services are offered by the website Bank Line?

There does not appear to be a wbsite of that name. However most Banks do offer online Banking services, including transfers, payments, standing orders and direct debits.


What is swift mt 700 in banking?

Banks issue letter of credits for which they generate the swift message "MT 700".


Would a decrease in the discount rate shift the ad curve?

which of the following choices would shift the AD curve to the left? a. increase in money supply b. FED buys bonds from private banks. c. A decrease in the discount rate. d. An increase in reserve ratio. e. Central Bank sells bonds on the open market. f. Central Bank uses open market to conduct Expansionary Policy.