What is the difference between a bank statement and a bank reconciliation statement?

A bank statement is a periodic document provided by a bank to an account holder, summarizing all transactions in a specific account over a given period. It includes details like deposits, withdrawals, interest earned, and fees charged. A bank reconciliation statement, on the other hand, is a process used to compare and match the transactions recorded in an organization’s internal accounting records with those reflected in the bank statement. Discrepancies between the two are identified, such as outstanding checks, uncleared deposits, or bank errors. The reconciliation statement aims to ensure the accuracy and consistency of an entity’s financial records with the bank’s records. In essence, while a bank statement is a report provided by the bank to the account holder, a bank reconciliation statement is an internal tool used by an organization to verify and rectify any discrepancies between their records and the bank’s records.

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