Bank - Accounting For Bank Accounts

Accounting For Bank Accounts

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.

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Accounting For Bank Accounts - Brokered Deposits
... One source of deposits for banks is brokers who deposit large sums of money on the behalf of investors through MAIC or other trust corporations ... This money will generally go to the banks which offer the most favorable terms, often better than those offered local depositors ... It is possible for a bank to engage in business with no local deposits at all, all funds being brokered deposits ...

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