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  • Checking accounts are a type of account held at a bank or credit union that allows you to access money through the use of paper checks that businesses or other individuals can deposit or turn into the bank for cash. Bank reconciliation statements are a feature of most checking accounts.

    Identification

    A bank reconciliation statement is a document provided by your bank each month that lists your starting balance, all of the checks and debits that you made during the month, the amounts and dates of your deposits and the balance you had remaining at the end of the month.

    Function

    The bank reconciliation statement allows you to check for unauthorized activities on your account, to see what checks and debits cleared, to ensure that all deposits were credited properly to your account and that all of your arithmetic in your checkbook register is correct.

    Use

    When you are finished comparing your bank statement to your checkbook register, subtract any checks or debits that have not yet cleared or been deducted from the balance your bank shows you currently have. The difference you receive should ideally match the amount shown in your check register.

    Benefits

    The bank account reconciliation statement allows you to spot errors, which can help you avoid overdrawing your account and having to pay fees.

    Considerations

    Many banks offer online banking that allows you to access your bank account information daily. Some people prefer to balance or reconcile their checking account against the online information daily as it is quicker than waiting until the end of the month for a complete bank statement.

    Source:

    Investopedia.com: Bank Reconciliation Statement

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