Bank Statement
What is a Bank Statement?
A bank statement shows transactions made with the bank.
![bs1](https://seeaccountingnow.online/wp-content/uploads/2020/04/bs1-1.jpg)
How it Works
During the month, a business will make many cash transactions.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/bs2-1.jpg)
Cash transactions include those where the business receives cash.
![bs3](https://seeaccountingnow.online/wp-content/uploads/2021/06/bs3.jpg)
They also include transactions where the business makes cash payments.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/bs4-1.jpg)
Deposits and Withdrawals
At the end of each month, the bank will issue a bank statement.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/bs5-1.jpg)
The bank statement will contain a record of cash transactions the bank made with the business.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/bs6-1.jpg)
Cash receipts will appear as deposits.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/bs7.jpg)
And cash payments will appear as withdrawals
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/bs8.jpg)
Balance
The bank statement will also show a balance.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/bs9.jpg)
This starts off as an opening balance .
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/bs10.jpg)
The opening balance shows how much money the business had in the bank at the beginning of the month.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/bs11.jpg)
During the month, the business will make deposits.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/bs12.jpg)
Deposits will increase the balance.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/bs13.jpg)
The business will also make withdrawals.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/bs14.jpg)
Withdrawals will reduce the balance.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/bs15.jpg)
The balance at month-end is known as closing balancing.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/bs16.jpg)
It shows how much money the business has in the bank at month-end.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/bs17.jpg)
© R.J. Hickman 2020