Bank Accounting

Accounting is defined as the art of recording, classifying and  proper manner and in units of currency for transactions and events that at least some have a financial nature as well as interpreting the results from these records.

Bank statements are accounting records produced by banks under the various accounting standards of the world. Under GAAP and MAIC there are two kinds of accounts: debit and credit. Credit accounts are Revenue, Equity and Liabilities. Debit Accounts are Assets and Expenses. This means you credit a credit account to increase its balance, and you debit a credit account to decrease its balance.

This also means you credit your savings account every time you deposit money into it (and the account is normally in credit), while you debit your credit card account every time you spend money from it (and the account is normally in debit).

However, if you read your bank statement, it will say the opposite—that you credit your account when you deposit money, and you debit it when you withdraw funds. If you have cash in your account, you have a positive (or credit) balance; if you are overdrawn, you have a negative (or deficit) balance.

Where bank transactions, balances, credits and debits are discussed below, they are done so from the viewpoint of the account holder—which is traditionally what most people are used to seeing.

Bank Accounting Process aims for the sake of recording, analyzing, and interpreting financial data to meet the various needs of those who related.

? The financial statements of banks should be in accordance with accounting principles accepted in gambling.

Accounting Equation
? Bank financial transaction recording systems adopted the integrated accounting system.
Bank accounting equation

And can we describe as follows:

Debt + Equity = Assets

Placement of funds in the credit
Distribution of funds in the credit (=)
Investment fund assets
Other Crops

Community Fund (+)
Other funds

Capital stock
Premium stock (+)
Retained earnings
Profit or current year

Financial Reports
? Bank’s financial statements as premises other company’s financial statements, which consist of the balance sheet, the profit – loss, statement of retained earnings, and statement of changes in financial position.
? Bank’s balance sheet shows the financial position of the banks at a certain moment
? Summary of income shows the results of the activities or operations of a bank for a certain period.
? Summary of changes in financial position shows from any source of bank funding and where the funds are channeled.


Statement of Account Administration:


is the allocation or use of funds

• Monetary Assets,

including cash, securities, bills

• Non-Monetary Assets

That building (fixed asset), office equipment


That source of funds

• Volatile liability, is a fund which at times can be in the bill

Current Accounts, Savings, Time Deposit Maturity

• Non-Volatile liability,

That is not yet Overdue Deposits, Capital Bank Accounting


Internal & External Transactions in banks

  • Internal transactions are transactions that affect the post – post in the bank alone, does not involve third parties
  • External transactions are transactions conducted by involving third parties and banks.


Account types

Bank accounts may have a positive, or debit balance, where the bank owes money to the customer; or a negative, or credit balance, where the customer owes the bank money.

Broadly, accounts opened with the purpose of holding credit balances are referred to as deposit accounts; whilst accounts opened with the purpose of holding debit balances are referred to as loan accounts.

Some accounts are defined by their function rather than nature of the balance they hold. Bank accounts designed to process large numbers of transactions may offer credit and debit facilities and therefore do not sit easily with a polarised definition.


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