A bank statement is a document that is issued by a bank once a month to its customers, listing the transactions impacting a bank account. The statement provides the following information:
The beginning cash balance in the account
+ The total amount of each deposited batch of checks and cash
- Funds withdrawn from the account
- Individual checks paid
+ Interest earned on the account
- Service fees and penalties charged against the account
= Ending cash balance in the account
The bank statement shows the cumulative balance of cash in the account, net of all the preceding transactions, as of the end of each day in the reporting period. Some banks still print these statements along with an accompanying set of images of all cleared checks.
The person receiving a bank statement should compare the information in it with his or her own records of the same transactions. Any discrepancies may have arisen at the bank (such as a transposed number in a check payment or a deposit), for which the bank should be contacted at once to make an adjusting entry. It is also possible that the error is in the recipient's records, in which case he or she should revise the company's accounting records to fix the error. This review process is known as a bank reconciliation.
Bank statements do not necessarily mirror the days in a calendar month. Instead, customers may request that their bank statements cover a one-month period that ends on a different date (for example, the 25th day of the month).
Bank statements can be delivered on paper or as electronic versions that customers can access on the bank website and download. They are usually updated on a bank's website on a daily basis, so that companies can engage in daily bank reconciliations to ensure that their book balances are up-to-date, and that any fraudulent items are spotted at once. On-line records usually include images of cleared checks.