What is the primary purpose of providing a bank statement to a customer?

• A. To notify the customer of upcoming loan offers
• B. To allow the customer to reconcile their records with the bank's records
• C. To advertise new banking products
• D. To provide investment advice

Answer: (B)

Verified step by step guidance

1. Understand the concept of a bank statement: A bank statement is a document provided by a bank to its customers, summarizing the account activity over a specific period. It includes details such as deposits, withdrawals, fees, and the ending balance.
2. Recognize the primary purpose of a bank statement: The main goal is to help customers reconcile their own financial records with the bank's records. This ensures accuracy and helps identify any discrepancies or unauthorized transactions.
3. Eliminate irrelevant options: Review the provided choices and discard options that do not align with the primary purpose of a bank statement. For example, advertising banking products or providing investment advice are not the main functions of a bank statement.
4. Focus on the correct purpose: Highlight that the correct answer is 'To allow the customer to reconcile their records with the bank's records,' as this is the fundamental reason banks issue statements.
5. Apply this understanding to real-world scenarios: Encourage the student to think about how reconciling records can help detect errors, prevent fraud, and maintain accurate financial records for budgeting and tax purposes.