bank profit and loss account
A profit and loss account is maintained in each bank on the last day of the year. In this account the income received by the bank is written and the expenses incurred by the bank are written. The main income and expenditure of the bank can be explained as follows:
(a) Following are the main incomes of the bank
(1) Interest on Loans (2) Interest on Advances (3) Interest on Cash Credits (4) Interest on Overdrafts (5) Discount on Bills Discounted on encashment of bills of exchange, (6) Commission received on other services of customers etc.
(b) Following are the major expenditure of banks
(1) Interest paid on deposits, (2) Salary, (3) Fees and allowances of operators, (4) Interest, taxes, insurance and electricity expenses, (5) Legal expenses, (6) Posts, telegrams and stamps (7) Audit Expenses, (8) Repairs to Bank’s properties, (9) Stationery and Advertisement Expenses, (10) Loss on sale of non-banking properties, (11) Other Expenses