Reading Bank Statements

Front

What is a bank statement?

Back

A bank statement is a summary of all transactions in a bank account over a specific period, including deposits, withdrawals, and fees.

Front

How do you calculate the present balance of a bank account?

Back

Present Balance = Previous Balance + Deposits - Withdrawals - Service Charges + Interest.

Front

What is a previous balance?

Back

The previous balance is the amount of money in a bank account at the end of the last statement period.

Front

What are deposits?

Back

Deposits are amounts of money added to a bank account, increasing the account balance.

Front

What are withdrawals?

Back

Withdrawals are amounts of money taken out of a bank account, decreasing the account balance.

Front

What is a service charge?

Back

A service charge is a fee deducted from a bank account for account maintenance or specific transactions.

Front

What is interest in the context of bank accounts?

Back

Interest is the money earned on the account balance, typically calculated as a percentage of the balance.

Front

How do you interpret a bank statement?

Back

To interpret a bank statement, review the transactions, calculate the present balance, and check for any discrepancies.

Front

What does it mean if a bank statement shows a negative balance?

Back

A negative balance indicates that the account is overdrawn, meaning more money has been withdrawn than is available.

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What is the importance of reconciling a bank statement?

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Reconciling a bank statement ensures that the account records match the bank's records, helping to identify errors or fraudulent activity.