Interpretation of Bank Statements - SS1 Accounting Lesson Note

A bank statement is a summary of all the transactions that have taken place in a bank account over a specific period of time. Interpreting a bank statement involves reviewing each of these elements and reconciling them with your own records to ensure accuracy. It is also important to look for any unauthorized transactions or errors and report them to the bank if necessary.

Understanding your bank statement can help you manage your finances and keep track of your account activity. Interpreting a bank statement involves understanding the information provided in the statement, which includes:

• Beginning and ending balance: The beginning balance is the amount of money in the account at the start of the statement period, while the ending balance is the amount of money in the account at the end of the period.

Deposits: These are the funds that have been added to the account during the statement period. Deposits may include paychecks, transfers from other accounts, or cash deposits.

Withdrawals: These are the funds that have been taken out of the account during the statement period. Withdrawals may include ATM withdrawals, checks written, or electronic transfers.

Fees: Banks may charge various fees for account maintenance, overdrafts, or other services. These fees will be listed on the statement.

Interest earned: If the account earns interest, the statement will show how much interest was earned during the statement period.