Fundamental of

Accountancy,
Business and
Management 2
Week 8-Module 11
Objective:
⦁ 1. Identify a bank statement and
understand the contents of a bank
statement. (ABM_FABM12-IIc-9)

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1
Bank Statement
A bank statement is a detailed
transaction history of the account over
the reporting period. It is a report
prepared by the bank for those
accounts that do not have passbooks.
The statement informs the account
holders of all transactions that occur
during the reporting period
Content of Bank
Statement

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Bank Statement is a detailed is a monthly financial
document that provides a summary of the account
holder’s activity. Bank statements are generally
prepared by the bank for the account holder at the
end of each month.

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 The top of a bank statement generally shows the
name of the account holder along with sensitive
information such as bank account number and
branch number. It also contains a summary table
that shows the time period, opening balance,
deposits, withdrawals, and closing balance. The
start date of the statement period is usually the
day after the end of the previous statement period.

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 Once produced and delivered to the customer,
details on the statement are not normally alterable;
any error found would normally be corrected on a
future statement, usually with some
correspondence explaining the reason for the
adjustment. Bank statements are commonly used
by the customer to monitor cash flow, check for
possible fraudulent transactions and perform bank
reconciliations. Historically they have been printed
on one or more pieces of paper, and either mailed
directly to the account holder or kept at the
financial institution's local branch for pick-up.

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“Quotations are commonly printed
as a means of inspiration and to
invoke philosophical thoughts from
the reader.

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A bank statement contains the following contents:

Debit memorandum
The bank charges a monthly fee for services rendered. The bank
usually charges a fee when the average bank balance of a bank
chequing account comes down to a certain required amount of
money. These fees are called bank charge which is shown on
the bank statement under code ‘SC.’ Bank sends a debit
memorandum with the bank statement wherein the detail of
bank charges is mentioned.

Bank service charge - monthly fee charged by the bank for its services
(Ex. cost of printing checks writing funds to other locations and other fees)

•NSF - (Not Sufficient Fund) – Banks also use a debit memorandum

when a deposited check from a customer “bounces” because of insufficient
funds. Nowadays bank refer to this as DAIF (Drawn Against Insufficient
Fund) or DAUD (Drawn Against Uncleared Deposits.

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Credit memorandum
A depositor/account holder may direct the
bank to collect his/her note receivable. The
bank deposits die realized proceeds of
notes receivable in the bank account of the
client. The bank sends a credit
memorandum for this transaction with the
bank statement. Many banks pay interest
on bank chequing accounts which is
shown in the bank statement.

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Thank you for watching
and listening!

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