Bank Statement Explained

A bank statement is a kind of financial statement that is issued by the banks to the companies or individual customers once in the month to show the financial transactions and financial status of their accounts. Bank statement provides information regarding the beginning cash of the account, the amount of cash and cheaques that are deposited to the bank in the form of batches, amount of cash that is withdrawn from the account, cheaques that are paid, added interest for that month on that account,  service and other charges and the ending balance of the account.

The bank statement is compiled in the form of cumulative balance of cash that is available in the account after compiling the net of preceding transactions of that account. The bank posts the bank statement on the provided address of the customer or any other business entity. It is the responsibility of the customer to compare the details of transactions on bank statement to the transactions of his or her own record. There may be some discrepancies in the bank statement that can be removed by contacting the bank and asking them to make an adjusting entry to remove those errors.

Nowadays electronic version of the bank statement is also available on the internet that can be downloaded by the customers for their own ease. Banks daily update these statements so that companies can keep their record up-to-date by engaging themselves in a daily bank reconciliation activity.

Other Related Accounting Articles:

• Income Statement Explained
• Vertical Analysis and Common Size Statements
• Limitations of Financial Statement Analysis
• Trend Analysis / Horizontal Analysis in financial Statements
• Financial Statement Analysis
• Over-capitalization and Under-capitalization
• Debtors Turnover Ratio | Accounts Receivable Turnover Ratio
• Creditors / Accounts Payable Turnover Ratio
• Over trading and Under Trading
• Inventory Pricing and Interim Financial Reporting – Inventory Valuation