I am transferring funds from 1 bank account to another say from A to B. If I transfer a sum of Rs.100 the bank charges are Rs.2 , now the entry in Bank A is Dr 102 and in Bank B it is Cr 100.
How to account for the bank charges in Bank transfer entry there is no option to do this.
What is the proper way of posting this transaction ?
The Bank transfer and the bank charges are two separate transactions. The bank transfer is your money to your money. The bank charges is your money to the banks money. Therefore the bank charges is a Spend Money.
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The way you’ve written it wouldn’t it be bank B to bank A ?
No, if it was then Bank B would be 100 and Bank A would be 98, as the charges would have been deducted. @nitinraheja just has the Dr and Cr back to front - but we understood what he meant, but congratulations for picking it up.