Balance per Bank
The balance per bank, also known as the bank balance or bank statement balance, refers to the amount of money in a bank account at a specific point in time, as reported by the bank. This balance is shown on the bank statement, which is a summary of all the transactions that have occurred in the account over a specific period, usually a month.
The balance per bank includes deposits, withdrawals, checks cleared, fees, interest, and other transactions that have been processed by the bank. It is important for businesses and individuals to reconcile their bank statement balance with their own accounting records periodically to ensure accuracy and identify any discrepancies. This process is known as bank reconciliation.
Example of the Balance per Bank
let’s go through an example of the balance per bank.
Imagine that John has a business checking account, and he receives his bank statement for the month of February. The bank statement shows the following transactions:
- Opening balance on February 1st: $5,000
- Deposit on February 5th: $3,000
- Withdrawal on February 10th: $1,500
- Deposit on February 15th: $2,000
- Check cleared on February 20th: $1,200
- Bank service fee on February 28th: $50
- Interest earned on February 28th: $25
Now, to calculate the balance per bank, we need to consider all these transactions:
Opening balance: $5,000
Add deposits: $3,000 + $2,000 = $5,000
Subtract withdrawals: $1,500
Subtract check cleared: $1,200
Subtract bank service fee: $50
Add interest earned: $25
So the balance per bank would be:
$5,000 (Opening balance) + $5,000 (Deposits) – $1,500 (Withdrawal) – $1,200 (Check cleared) – $50 (Bank service fee) + $25 (Interest earned) = $7,275
The balance per bank on John’s statement for the end of February would be $7,275.
