Bank Statement
A monthly or periodic document issued by a bank listing all transactions, beginning and ending balances, and fees for an account during a specific period.
What is Bank Statement?
A bank statement is an official record provided by a financial institution summarizing all activity in an account over a defined period — typically one month. It lists deposits, withdrawals, electronic transfers, checks cleared, ATM transactions, interest earned, and service charges, along with the opening and closing balances. Bank statements serve several critical functions: they provide the reference data for bank reconciliation (matching the bank's records to the company's or individual's own books); they are primary evidence of cash flows for tax filing, loan applications, and audits; and they help detect errors, unauthorized transactions, and fraud. Most banks now offer electronic statements (e-statements) in place of paper. Under Regulation E, U.S. financial institutions must provide statements for consumer accounts at least quarterly, though monthly is standard. Businesses are required to reconcile bank statements monthly as a basic internal control.
Example
A small business owner receives her January bank statement showing: opening balance $12,450, deposits $18,300, checks cleared $14,200, wire transfers out $3,100, bank fee $25, closing balance $13,425. She reconciles this against her accounting software, identifying a $500 check written in January that has not yet cleared — a legitimate timing difference — and a $75 unauthorized charge that she disputes with the bank.