Bank service fee

Definition

A bank service fee is a charge imposed by a financial institution for account maintenance or specific transactions. These fees can include monthly maintenance fees, ATM fees, and charges for overdrafts or insufficient funds.

5 Must Know Facts For Your Next Test

1. Bank service fees are often detailed in the bank reconciliation process.
2. These fees need to be accounted for when preparing journal entries.
3. Common types of bank service fees include monthly account maintenance and transaction-specific charges.
4. Bank service fees can affect the cash balance reported on financial statements.
5. Reconciling bank statements helps identify and verify all incurred bank service fees.

Related terms

Bank Reconciliation:

Process of matching the balances in an entity's accounting records to the corresponding information on a bank statement.

Journal Entry:

A record of a business transaction in an accounting system.

Overdraft Fee: A charge incurred when withdrawals from a bank account exceed the available balance.