Service charges are ______.Multiple select question.subtracted from the cash book's balance of a bank reconciliationbank charges for processing your transactionssubtracted from the bank's balance of a bank reconciliationcharges for using a major credit card
Question
Service charges are ______.Multiple select question.subtracted from the cash book's balance of a bank reconciliationbank charges for processing your transactionssubtracted from the bank's balance of a bank reconciliationcharges for using a major credit card
Solution
Service charges are:
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Bank charges for processing your transactions: This is the fee that banks charge for carrying out transactions on your behalf. These transactions could be anything from money transfers, cheque processing, overdrafts, etc.
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Subtracted from the cash book's balance of a bank reconciliation: In a bank reconciliation, service charges are subtracted from the cash book's balance. This is because these charges are expenses that reduce the amount of cash available in the bank account.
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Charges for using a major credit card: Some banks or businesses may charge a service fee for using a major credit card. This is to cover the cost of processing the credit card transaction.
However, service charges are not subtracted from the bank's balance of a bank reconciliation. The bank's balance in a bank reconciliation is the balance according to the bank's records, which already includes any service charges deducted by the bank.
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