How to write accounting entries for bank SMS service fees?

In order to better receive reminders of account balances when handling related business at banks, companies generally activate SMS notification services. So when companies pay bank SMS service fees, how do they write the relevant accounting entries?

Accounting entries for bank SMS service fees

Debit: financial expenses - SMS service fees

Credit: bank deposits

What is Financial charges?

Financial expenses refer to the expenses incurred by an enterprise to raise funds required for production and operations.

Includes interest expenses (minus interest income), exchange gains and losses incurred during the production and operation period of the enterprise (some enterprises, such as commodity circulation enterprises and insurance enterprises, conduct separate accounting and are not included in financial expenses), financial institution handling fees , cash discounts incurred by the enterprise or cash discounts received, etc. However, the interest expenses incurred during the preparation period of the enterprise should be included in the start-up expenses; the borrowing costs incurred for the acquisition, construction or production of assets that meet the capitalization conditions should be capitalized, and should be recorded in the "construction in progress", "manufacturing expenses" and other accounts. accounting.

The borrowing direction of financial expenses

Financial expenses refer to the expenses incurred by an enterprise to raise funds required for production and operations. Financial expenses belong to the profit and loss category. When the income items in the profit and loss category are recorded, increases will be recorded as credits and decreases will be recorded as debits. When expenditure items in the profit and loss category are recorded, increases will be recorded as debits and decreases will be recorded as credits.

What is a bank deposit?

Bank deposits are funds stored in banks and are a component of monetary funds. According to the provisions of my country's cash management system, every enterprise must open a deposit account at the People's Bank of China or a professional bank to handle deposits, withdrawals and transfer settlements. In addition to the monetary funds of the enterprise, it can keep a small amount of cash within the prescribed limit. , must be deposited in the bank. The company's bank deposits mainly include: settlement account deposits, letter of credit deposits, foreign deposits, etc.