What is a bank statement?
The bank's record of deposits, withdrawals, and the ending cash balance for a period. It is independent support for book cash, not a journal.
Definition
A bank statement is the file the bank issues showing every posting it made to your account during a period, plus the ending cash it reports. In books-language, it is an independent source document, not a journal and not the company's cash account.
The bank produces it. You use it to prove cash on the books, not to replace the books.
Where it shows up
Balance Sheet: Related to the cash the bank says you hold.
Cash flow: Related to the deposits and withdrawals the bank posted.
P&L: Related to nothing extra unless bank fees on the statement hit expense.
See also: Bank Reconciliation · Operating Bank Account · Source Document
When you look at the Balance Sheet, cash sits in current assets. The bank's period record is the independent figure you compare to that cash line.
A higher bank total than book cash often means outstanding checks. A lower bank total often means a deposit in transit, or a bank posting the books missed.
The Income Statement does not carry this report as a line. Bank fees printed on it can later hit expense if the books have not recorded them yet.
On the Statement of Cash Flows, the deposits and withdrawals the bank posted are the movements you are proving. Timing items explain why the books and the bank still disagree at period end.
You keep the PDF or paper file as support. It is not a general-ledger account, and it does not post itself.
How it works
The bank lists every posting it made during the period. Deposits raise its record of your cash; checks, card charges, transfers, and fees lower it.
The opening balance should match last period's ending balance on the same account. If it does not, you stop and find the break before you trust the new total.
Each line has a date, an amount, and usually a description or check number. Those details are what you match to the books.
The ending balance is the bank's cash figure on the last day of the period. That number is the starting point for the monthly match against book cash.
Items you recorded that the bank has not posted will not appear yet. Outstanding checks and deposits in transit show up on the reconciling worksheet, not as extra lines the bank forgot to print.
Items the bank posted that you missed will appear. Fees, interest, and unexpected charges are the usual finds, and those belong on the books after you see them.
A bank feed may import the same lines into the software. The official period record is still the bank's report, and the feed does not replace it.
Keep the file with the month-end workpapers. Auditors and future you will want the same PDF you downloaded, not a screenshot of a live balance.
Example
A florist opens the July PDF from the bank. The report shows an ending balance of $13,100 for the shop's checking account.
July's books show cash of $12,400. The two figures do not match on the first look.
The PDF still includes a $1,200 bakery check that has not cleared, and it does not yet include a $500 night-slot deposit from July 31. Those two timing items sit on the reconciling worksheet.
No journal is made from the PDF itself. The report is the source you match; the books change only if the bank posted something the florist never recorded.
A $15 service charge on the July PDF is that kind of missed item. After the match, a later entry would record the fee, and expense would move.
Once every line is explained, the florist files the PDF with the July close. The cash line on the Balance Sheet now has independent support.
Common mix-ups
A bank statement is not the books. It is the bank's record; book cash is yours, and the two are proved against each other.
A bank statement is not a journal entry. Seeing a line on the PDF does not post it; someone still has to record missed items on the books.
A bank statement is not a bank feed. The feed is an import of transactions; the statement is the bank's official period report.
Do not treat the ending bank total as spendable cash without listing outstanding checks. The books may already have used that money.
Related terms
- Bank Reconciliation: Matching the book cash balance to the bank statement and explaining every difference.
- Operating Bank Account: The main checking account through which day-to-day receipts and payments flow.
- Bank Feed: The automatic import of bank transactions into the accounting records.
- Bank Fees: Charges the bank deducts for account services and transactions.
- Source Document: The original receipt, bill, or statement that supports an entry.
- Ending Balance: An account's balance at the close of the reporting period.
- Outstanding Check: A check written but not yet cleared by the bank.
- Cash Position: The amount of cash on hand at a given moment across all accounts.