Bank Reconciliation Statement

  

A bank reconciliation statement is the document that attempts to reconcile the company's bank account with its financial records. In that sense, it is the restoration of friendly relations between a company's banker and a company's accountant through the agreement on the deposits, withdrawals, and financial activity impacting a bank account every month and beyond (usually monthly and then annually).

The bank reconciliation statement gives a summary of a company's income versus expenditures from two sources to provide a concise picture of the company's financial health. Or lack thereof.

Related or Semi-related Video

Finance: What is an Omnibus Account?111 Views

00:00

Finance a la shmoop. What is an omnibus account?

00:06

Herbi just eats leaves, Carni just eats meat, Omni well it's pretty much [Different buses eating stuff]

00:12

everything. So yeah an omnibus as in bus-i-ness or business account services is

00:18

a bunch of investors who've all pitched in or wired in their capital to become a

00:22

percentage owner of that omnibus account. Why would people do this? Scale, volume,

00:28

discounts size, heft. When you have a lot of money in an account basic things like [Lots of money in a suitcase]

00:34

audit and legal fees and brokerage services and the fees with them and

00:38

other one-off costs get amortized across a lot of people in dollars invested [Definition of Amortization]

00:44

rather than being laid entirely or solely on one investor where they can

00:49

then be a meaningful percentage of the total and with an omnibus account you [Bus labelled Omni eating leaves]

00:53

also get anonymity since it's a broker dealing in street name with the account [Anonymity stamp]

00:58

interfacing with the street well investors can live if they want in the

01:02

lovely dark shadows of Erewhon. Omnibus accounts are sort of like your own [Full moon in a dark sky]

01:08

custom mutual fund without the whole nav, net asset value stamp requirements at

01:13

the end of each trading day and all the other regulations and filings and legal

01:17

crap needed for publicly offered securities it's like having a fully [Book labelled my very own omnibus account]

01:21

gassed up bus with a working GPS and Waze system you can drive anywhere you [Guy sat on a bus]

01:26

want on the investing landscape you don't have to tell anyone outside of

01:29

your own partners about it, and it works great as long as you all want to eat the

01:34

same kind of financial cooking.. [Omni asking Carni if he is going to finish his food]

Up Next

Finance: What is an Income Statement?
51 Views

What is an income statement? Income statements are important financial documents that all companies keep to track profitability. It shows figures t...

Finance: What is a Consolidated Income Statement?
12 Views

What is a Consolidated Income Statement? Consolidated income statements (or any financial statements) are just the statements of all businesses wit...

Finance: What is a Merchant Account?
4 Views

A merchant account is a banking account owned by...a merchant, i.e. someone selling something. Or just someone with a few grand in the bank and dec...

Finance: What is a Wrap Account?
31 Views

A wrap account is an account that wraps into one annual fee all of the services you'd normally pay for a la carte at a given brokerage.

Find other enlightening terms in Shmoop Finance Genius Bar(f)