On the flip side, you would add that extra $150 to your own accounts payable. A debit memo would then get issued to the supplier for that extra cost and would get added to their accounts receivable. However, a few months later the same item increased in price by $150. This helps to indicate when adjustments get made and it will end up increasing the total amount due.įor example, let’s say you happened to make a purchase for something that totaled $1,000. As well, it can be fairly common for debit memorandums to get used within the double-entry accounting system. On top of a monthly account service fee, you might also see a debit memo occur due to a printed or bounced check, for example. When this happens, your account will include a debit memo that notes the deduction amount. In this case, your new balance would be $4,980. ![]() This amount gets deducted from your total account balance. Because it’s a checking account, you might get charged $20 per month as a service fee. This is so you know exactly what has happened and why it has occurred.įor example, let’s say that your bank account currently has $5,000 in it. When this happens, a debit memorandum gets noted on your bank statement. It could be for any number of reasons, but they can sometimes get taken out automatically. You have most likely had certain fees charged to your bank account at some point or another.
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