ACCOUNTING FOR

FINANCIAL
INSTITUTION
Section 1
Assistant lecture
Alya elfedawy
: FILL IN GAP
 Institution that deals in ……… and its
substitutes and provides other financial
services.
 (money)
 Banks accept ………. and make ………… to
customers,
 (deposits , loans ) .
 Banks can achieve profit if …….. Is more than
………..
( interest earned , interest paid )
 Banks derive a …….. from the difference in the ……….
paid to lenders (depositors) and charged to borrowers,
respectively.
(profit , interest )
 bank can make a ……… if it had interest earned lower
than interest paid .
 ( loss )
 the roles of commercial banks services offered are:

a. Exchange of currency and commercial notes and loans

b. Financial advices and cash management
c. Risk management role
d. Savings and investment advisor
)IN PUTS( ‫ويمكن توضيح مدخالت البنك‬
:‫) كما يلى‬OUT PUTS( ‫وايضا مخرجاته‬

Loans Make Banks Accept Deposits

+ -
charged Paid

Interest Interest
Earned
Profit = IE - IP
Paid

Definitions & types Dr Makram Bassily 4

CLASSIFICATIONS'BANKS
 The three major classes of banks are:
1 - commercial banks,
2 - investment banks,
3 - central banks
 Central bank act as:

a. The only fiscal agent of the government

b. Has the right to issuing notes to be used as legal
tender
c. Supervising the operations of the commercial
banking system and implementing monetary
policy
d. All of the above
: E.X
 Suppose that the branch of national bank in
mansoura had adeposit of value 10000$ with
interest %10 .
Require :
1. Determine the kind of manager if you know
that he had keep with liquidity percentage
%30 .
2. How money it takes on the depositer ?
:COMMERCIAL BANKS .1

Interest paid interest earned

Depositers Borrowers
BALANCE SHEET
Liabilities Assets
Deposits Cash
Loans
Non deposits Reserve
Investment
Owners’ Equity

Net liabilities Net assets

Assets = Liabilities + Owners’ Equity
 Demand deposits 

NOW accounts 

Saving deposits 

Time deposits 

customer deposits 

‫ايداع تحت الطلب‬ 

Checking accounts 

traditional saving accounts 

‫اوراق االدخار‬ 

certificate of deposits 

‫شهادات االستثمار‬ 

Non- interest 

Individuals and not-for profit 

lowest interest rate 

stipulated interest rate 

EXAMPLE
 Suppose that the branch of national bank in
mansoura had a deposit of value 100,000$
with interest %10 and had a loans of value
50,000 with interest %8 .
 Require

1. Determine the type of manager if you know

that the investment percentage 40% .
2. Determine , what’s paid and what’s
earned ?