What Is a Statement of Accounts? Definition and Types
Decode your financial history. Grasp the core purpose of these vital summaries and how they illuminate your account activity.
A statement of accounts serves as a comprehensive summary of financial activities between two parties over a defined period. This document provides a clear record of transactions, helping individuals and businesses track their financial positions. Understanding these statements is important for managing personal finances, reconciling business records, and ensuring accuracy in financial dealings.
Defining a Statement of Accounts
A statement of accounts is a document providing a detailed summary of financial transactions within a specific account over a defined period. Its purpose is to present a clear record of money owed, received, or transferred. These statements are issued by entities that manage funds or extend credit, such as financial institutions, utility providers, or businesses.
Recipients are account holders, customers, or clients who review their financial activity. The statement informs the recipient of their current balance, past transactions, and any payments or charges. It allows both the issuer and recipient to maintain accurate records. The period covered can vary, commonly monthly to quarterly.
Key Information in a Statement of Accounts
Statements of accounts feature core information. They identify the account holder’s name and address, along with the issuer’s name and contact information. A unique account number is always present. The statement indicates the statement period and an opening balance.
A detailed list of transactions follows, noting the date, description, and amount. This includes payments or credits received, which reduce an outstanding balance. Charges or debits incurred, such as purchases or fees, are also itemized, increasing an outstanding balance. The statement concludes with a closing balance and summary totals of debits and credits for the period.
Common Types of Statements of Accounts
Various types of statements of accounts exist for different financial relationships.
Bank statements summarize deposits, withdrawals, and transfers within checking or savings accounts, enabling account holders to reconcile their personal records. These are typically issued monthly and detail interest earned or fees charged.
Credit card statements provide a comprehensive overview of credit card activity, including purchases, cash advances, payments made, and any interest or late fees applied. They outline the minimum payment due and the payment due date, helping cardholders manage their revolving credit.
Customer statements, often called accounts receivable statements, are issued by businesses to their clients, detailing outstanding invoices, payments received, and any remaining balance owed for goods or services.
Vendor statements, which represent accounts payable, are received by businesses from their suppliers, itemizing purchases made on credit and payments remitted to the vendor.
Loan statements detail the principal balance, interest accrued, and a history of payments made on various loans, such as mortgages or auto loans. These statements help borrowers track their repayment progress and understand the remaining debt.
Investment statements summarize holdings and transactions within brokerage or retirement accounts, showing asset values, purchases, sales, and dividends or interest received.