diff --git a/TODO b/TODO
index cd50590..21bb277 100644
--- a/TODO
+++ b/TODO
@@ -18,7 +18,6 @@ FEATURES that would be nice to have someday (in no particular order)
 * better 404 and 500 error pages
 * searching
 * reporting
-* account reconciliation
 * transaction templates ("saved" or "memorized" transactions)
 * scheduled transactions (occur automatically at specified intervals)
 * print stylesheet
@@ -32,3 +31,5 @@ FEATURES that would be nice to have someday (in no particular order)
 * make bucket reallocation work from bucket perma
 * support for multiple 'aside' buckets in a single account
 * graphical icons to replace the textual icons for various actions
+* add/edit transactions from the reconciliation view
+* statement API
diff --git a/app/concerns/categorized_items.rb b/app/concerns/categorized_items.rb
new file mode 100644
index 0000000..a1f1243
--- /dev/null
+++ b/app/concerns/categorized_items.rb
@@ -0,0 +1,13 @@
+module CategorizedItems
+  def deposits
+    @deposits ||= to_a.select { |item| item.amount > 0 }
+  end
+
+  def checks
+    @checks ||= to_a.select { |item| item.amount < 0 && item.event.check_number.present? }
+  end
+
+  def expenses
+    @expenses ||= to_a.select { |item| item.amount < 0 && item.event.check_number.blank? }
+  end
+end
diff --git a/app/controllers/statements_controller.rb b/app/controllers/statements_controller.rb
new file mode 100644
index 0000000..44925ff
--- /dev/null
+++ b/app/controllers/statements_controller.rb
@@ -0,0 +1,54 @@
+class StatementsController < ApplicationController
+  before_filter :find_account, :only => %w(index new create)
+  before_filter :find_statement, :only => %w(show edit update destroy)
+
+  def index
+    @statements = account.statements.balanced
+  end
+
+  def new
+    @statement = account.statements.build(:ending_balance => account.balance,
+      :occurred_on => Date.today)
+  end
+
+  def create
+    @statement = account.statements.create(params[:statement])
+    redirect_to(edit_statement_url(@statement))
+  end
+
+  def show
+  end
+
+  def edit
+    @uncleared = account.account_items.uncleared(:with => statement, :include => :event)
+  end
+
+  def update
+    statement.update_attributes(params[:statement])
+    redirect_to(account)
+  end
+
+  def destroy
+    statement.destroy
+    redirect_to(account)
+  end
+
+  protected
+
+    attr_reader :uncleared, :statements
+    helper_method :uncleared, :statements
+
+    attr_reader :account, :statement
+    helper_method :account, :statement
+
+    def find_account
+      @account = Account.find(params[:account_id])
+      @subscription = user.subscriptions.find(@account.subscription_id)
+    end
+
+    def find_statement
+      @statement = Statement.find(params[:id])
+      @account = @statement.account
+      @subscription = user.subscriptions.find(@account.subscription_id)
+    end
+end
diff --git a/app/helpers/application_helper.rb b/app/helpers/application_helper.rb
index 2c2b0cd..d7daaaa 100644
--- a/app/helpers/application_helper.rb
+++ b/app/helpers/application_helper.rb
@@ -24,4 +24,8 @@ def application_last_deployed
       "(not deployed)"
     end
   end
+
+  def format_cents(amount, options={})
+    number_to_currency(amount/100.0, options)
+  end
 end
diff --git a/app/helpers/statements_helper.rb b/app/helpers/statements_helper.rb
new file mode 100644
index 0000000..6ca3dc2
--- /dev/null
+++ b/app/helpers/statements_helper.rb
@@ -0,0 +1,7 @@
+module StatementsHelper
+  def uncleared_row_class(item)
+    classes = [cycle('odd', 'even')]
+    classes << "cleared" if item.statement_id
+    classes.join(" ")
+  end
+end
diff --git a/app/models/account.rb b/app/models/account.rb
index 32b423e..b9874f5 100644
--- a/app/models/account.rb
+++ b/app/models/account.rb
@@ -37,7 +37,9 @@ def with_defaults
   end
 
   has_many :line_items
-  has_many :account_items
+  has_many :statements
+
+  has_many :account_items, :extend => CategorizedItems
 
   after_create :create_default_buckets, :set_starting_balance
 
diff --git a/app/models/account_item.rb b/app/models/account_item.rb
index 50c4cf1..a54d413 100644
--- a/app/models/account_item.rb
+++ b/app/models/account_item.rb
@@ -10,10 +10,31 @@ class AccountItem < ActiveRecord::Base
 
   belongs_to :event
   belongs_to :account
+  belongs_to :statement
 
   after_create :increment_balance
   before_destroy :decrement_balance
 
+  named_scope :uncleared, lambda { |*args| AccountItem.options_for_uncleared(*args) }
+  
+  def self.options_for_uncleared(*args)
+    raise ArgumentError, "too many arguments #{args.length} for 1" if args.length > 1
+
+    options = args.first || {}
+    raise ArgumentError, "expected Hash, got #{options.class}" unless options.is_a?(Hash)
+    options = options.dup
+
+    conditions = "statement_id IS NULL"
+    parameters = []
+
+    if options[:with]
+      conditions = "(#{conditions} OR statement_id = ?)"
+      parameters << options[:with]
+    end
+
+    { :conditions => [conditions, *parameters], :include => options[:include] }
+  end
+
   protected
 
     def increment_balance
diff --git a/app/models/statement.rb b/app/models/statement.rb
new file mode 100644
index 0000000..ebd6fb9
--- /dev/null
+++ b/app/models/statement.rb
@@ -0,0 +1,92 @@
+class Statement < ActiveRecord::Base
+  belongs_to :account
+  has_many :account_items, :extend => CategorizedItems, :dependent => :nullify
+
+  before_create :initialize_starting_balance
+  after_save :associate_account_items_with_self
+
+  named_scope :pending, :conditions => { :balanced_at => nil }
+  named_scope :balanced, :conditions => "balanced_at IS NOT NULL"
+
+  attr_accessible :occurred_on, :ending_balance, :cleared
+
+  validates_presence_of :occurred_on, :ending_balance
+
+  def ending_balance=(amount)
+    if amount.is_a?(Float) || amount =~ /[.,]/
+      amount = (amount.to_s.tr(",", "").to_f * 100).to_i
+    end
+
+    super(amount)
+  end
+
+  def balance
+    ending_balance
+  end
+
+  def balanced?(reload=false)
+    unsettled_balance(reload).zero?
+  end
+
+  def settled_balance(reload=false)
+    @settled_balance = nil if reload
+    @settled_balance ||= account_items.to_a.sum(&:amount)
+  end
+
+  def unsettled_balance(reload=false)
+    @unsettled_balance = nil if reload
+    @unsettled_balance ||= starting_balance + settled_balance(reload) - ending_balance
+  end
+
+  def cleared=(ids)
+    @ids_to_clear = ids
+    @already_updated = false
+  end
+
+  protected
+
+    def initialize_starting_balance
+      self.starting_balance ||= account.statements.balanced.last.try(:ending_balance) || 0
+    end
+
+    def associate_account_items_with_self
+      return if @already_updated
+      @already_updated = true
+
+      account_items.clear
+
+      ids = connection.select_values(sanitize_sql([<<-SQL.squish, account_id, ids_to_clear]))
+        SELECT ai.id
+          FROM account_items ai
+         WHERE ai.account_id = ?
+           AND ai.id IN (?)
+      SQL
+
+      connection.update(sanitize_sql([<<-SQL.squish, id, ids]))
+        UPDATE account_items
+           SET statement_id = ?
+         WHERE id IN (?)
+      SQL
+
+      account_items.reset
+
+      if @ids_to_clear
+        if balanced?(true) && !balanced_at
+          update_attribute :balanced_at, Time.now.utc
+        elsif !balanced? && balanced_at
+          update_attribute :balanced_at, nil
+        end
+      end
+    end
+
+  private
+
+    def sanitize_sql(sql)
+      self.class.send(:sanitize_sql, sql)
+    end
+
+    def ids_to_clear
+      @ids_to_clear || []
+    end
+
+end
diff --git a/app/views/accounts/_name.html.haml b/app/views/accounts/_name.html.haml
index 86f97d8..4bdd209 100644
--- a/app/views/accounts/_name.html.haml
+++ b/app/views/accounts/_name.html.haml
@@ -1,2 +1,13 @@
-%span.actions== #{link_to_function("Rename", "Accounts.rename(#{account_path(account).to_json}, #{account.name.to_json}, #{form_authenticity_token.to_json})")} | #{link_to("Delete", account_path(account), :method => :delete, :confirm => "Are you sure you want to delete this account?")}
+%span.actions
+  - if account.statements.pending.any?
+    = link_to("Resume reconciling", edit_statement_path(account.statements.pending.first))
+  - else
+    = link_to("Reconcile", new_account_statement_path(account))
+  |
+  - if account.statements.balanced.any?
+    = link_to("Prior statements", account_statements_path(account))
+    |
+  = link_to_function("Rename", "Accounts.rename(#{account_path(account).to_json}, #{account.name.to_json}, #{form_authenticity_token.to_json})")
+  |
+  = link_to("Delete", account_path(account), :method => :delete, :confirm => "Are you sure you want to delete this account?")
 &= account.name
diff --git a/app/views/events/_balance.html.haml b/app/views/events/_balance.html.haml
index 35bd256..e341735 100644
--- a/app/views/events/_balance.html.haml
+++ b/app/views/events/_balance.html.haml
@@ -1,6 +1,10 @@
 %tr.current_balance
-  %th.date= Date.today.strftime("%Y-%m-%d")
-  %th Current balance
+  - if container.is_a?(Statement)
+    %th.date= statement.occurred_on.strftime("%Y-%m-%d")
+    %th Ending balance
+  - else
+    %th.date= Date.today.strftime("%Y-%m-%d")
+    %th Current balance
   %th.number.total.balance{:colspan => 2}= balance_cell(container, :tag => "span", :id => "balance")
 %tr.spacer
   %td{:colspan => 4}
diff --git a/app/views/statements/_subtotal.html.haml b/app/views/statements/_subtotal.html.haml
new file mode 100644
index 0000000..a103af0
--- /dev/null
+++ b/app/views/statements/_subtotal.html.haml
@@ -0,0 +1,8 @@
+.subtotal
+  .settled
+    Subtotal:
+    %span.subtotal_dollars= format_cents(subtotal)
+  .remaining
+    Remaining:
+    %span.remaining_dollars{:class => statement.unsettled_balance.zero? ? "balanced" : nil}
+      = format_cents(statement.unsettled_balance)
diff --git a/app/views/statements/_uncleared.html.haml b/app/views/statements/_uncleared.html.haml
new file mode 100644
index 0000000..adafcc1
--- /dev/null
+++ b/app/views/statements/_uncleared.html.haml
@@ -0,0 +1,9 @@
+%tr{:id => dom_id(uncleared), :class => uncleared_row_class(uncleared)}
+  %td.checkbox= check_box_tag "statement[cleared][]", uncleared.id, uncleared.statement_id, :id => dom_id(uncleared, :check), :onclick => "Statements.toggleCleared(#{uncleared.id})"
+  %td.date{:onclick => "Statements.clickItem(#{uncleared.id})"}= uncleared.occurred_on.strftime("%Y-%m-%d")
+  - if uncleared.event.check_number
+    %td.check{:onclick => "Statements.clickItem(#{uncleared.id})"}= "#" + uncleared.event.check_number.to_s
+  %td.actor{:onclick => "Statements.clickItem(#{uncleared.id})"}&= uncleared.event.actor
+  %td.number{:onclick => "Statements.clickItem(#{uncleared.id})"}
+    %span{:style => "display: none;", :id => dom_id(uncleared, :amount)}= uncleared.amount
+    = format_cents(uncleared.amount.abs)
diff --git a/app/views/statements/edit.html.haml b/app/views/statements/edit.html.haml
new file mode 100644
index 0000000..14ead84
--- /dev/null
+++ b/app/views/statements/edit.html.haml
@@ -0,0 +1,55 @@
+#data.content
+  %h2== Balance your statement
+
+  .statement.edit.form
+
+    - form_for(statement) do |form|
+
+      %table.general
+        %tr
+          %th.occurred_on Statement date
+          %th.starting_balance Starting balance
+          %th.ending_balance Ending balance
+        %tr
+          %td.occurred_on= form.calendar_date_select :occurred_on, :size => 10
+          %td#starting_balance.starting_balance.number= format_cents(statement.starting_balance)
+          %td.ending_balance= "$" + form.text_field(:ending_balance, :size => 8, :class => "number", :value => format_cents(statement.ending_balance, :unit => ""), :onchange => "Statements.updateBalances()")
+        
+      - if uncleared.deposits.any?
+        %fieldset#deposits
+          %legend Deposits
+
+          .uncleared.deposits
+            %table= render :partial => "statements/uncleared", :collection => uncleared.deposits
+
+          = render :partial => "statements/subtotal", :object => statement.account_items.deposits.sum(&:amount)
+
+      - if uncleared.checks.any?
+        %fieldset#checks
+          %legend Checks
+
+          .uncleared.checks
+            %table= render :partial => "statements/uncleared", :collection => uncleared.checks
+
+          = render :partial => "statements/subtotal", :object => statement.account_items.checks.sum(&:amount)
+
+      - if uncleared.expenses.any?
+        %fieldset#expenses
+          %legend Other expenses
+
+          .uncleared.expenses
+            %table= render :partial => "statements/uncleared", :collection => uncleared.expenses
+
+          = render :partial => "statements/subtotal", :object => statement.account_items.expenses.sum(&:amount)
+
+      #balanced{:style => visible?(statement.balanced?)}
+        %h3 Congratulations!
+
+        %p Your records exactly match your account statement, and everything balances.
+
+        %p= form.submit "Close out this statement"
+
+      %p#actions{:style => visible?(!statement.balanced?)}
+        = form.submit "Save for later"
+        or
+        = link_to("abort this reconciliation", statement_path(statement), :method => :delete, :confirm => "Are you sure you want to discard this reconciliation?")
diff --git a/app/views/statements/index.html.haml b/app/views/statements/index.html.haml
new file mode 100644
index 0000000..47b24c6
--- /dev/null
+++ b/app/views/statements/index.html.haml
@@ -0,0 +1,17 @@
+#data.content
+  .navigation
+    = link_to "Dashboard", subscription_path(subscription)
+    = link_to h(account.name), account_path(account)
+
+  %h2 Previous Statements
+
+  - if statements.empty?
+    %p== You have not yet balanced this account against any statements from your financial institution. You may start by clicking #{link_to("here", new_account_statement_path(account))}, to begin balancing this account.
+
+  - else
+    %ul
+      - statements.each do |statement|
+        %li
+          = link_to(statement.occurred_on.strftime("%Y-%m-%d"), statement_path(statement))
+          = ":"
+          = format_cents(statement.ending_balance)
diff --git a/app/views/statements/new.html.haml b/app/views/statements/new.html.haml
new file mode 100644
index 0000000..00b8bf4
--- /dev/null
+++ b/app/views/statements/new.html.haml
@@ -0,0 +1,25 @@
+#data.content
+  %h2== Let's reconcile your #{h(account.name)} account
+
+  .form
+
+    - form_for([account, statement]) do |form|
+
+      %fieldset
+
+        %p First, take a look at the account statement from your bank or other financial institution.
+
+        %p If you haven't reconciled in a while, make sure you start with the <em>oldest</em> statement and work forward.
+        
+        %p
+          <strong>When</strong> was the statement printed?
+          = form.calendar_date_select :occurred_on, :size => 10
+        
+        %p
+          <strong>What</strong> is the ending balance?
+          = "$" + form.text_field(:ending_balance, :size => 8, :class => "number", :value => format_cents(statement.ending_balance, :unit => ""), :onchange => "this.value = Money.format(this)")
+
+      %p
+        = form.submit "Go to step #2"
+        or
+        = link_to("cancel", account_path(account))
diff --git a/app/views/statements/show.html.haml b/app/views/statements/show.html.haml
new file mode 100644
index 0000000..8c4ca9c
--- /dev/null
+++ b/app/views/statements/show.html.haml
@@ -0,0 +1,15 @@
+#data.content
+  .navigation
+    = link_to "Dashboard", subscription_path(subscription)
+    = link_to h(account.name), account_path(account)
+    = link_to "Prior statements", account_statements_path(account)
+
+  %h2
+    %span.actions
+      = link_to("Delete", statement_path(statement), :confirm => "Are you sure you want to delete this statement?", :method => :delete)
+    Statement for period ending
+    = statement.occurred_on.strftime("%Y-%m-%d")
+
+  %table.entries
+    = render :partial => "events/balance", :locals => { :container => statement }
+    = render(statement.account_items)
diff --git a/config/routes.rb b/config/routes.rb
index 216ea5a..5bd28ef 100644
--- a/config/routes.rb
+++ b/config/routes.rb
@@ -4,9 +4,9 @@
   map.resources :subscriptions, :has_many => [:accounts, :events, :tags]
   map.resources :events, :has_many => :tagged_items, :member => { :update => :post }
   map.resources :buckets, :has_many => :events
-  map.resources :accounts, :has_many => [:buckets, :events]
+  map.resources :accounts, :has_many => [:buckets, :events, :statements]
   map.resources :tags, :has_many => :events
-  map.resources :tagged_items
+  map.resources :tagged_items, :statements
 
   map.connect "", :controller => "subscriptions", :action => "index"
 end
diff --git a/db/migrate/20090421221109_add_statements.rb b/db/migrate/20090421221109_add_statements.rb
new file mode 100644
index 0000000..2dc124d
--- /dev/null
+++ b/db/migrate/20090421221109_add_statements.rb
@@ -0,0 +1,24 @@
+class AddStatements < ActiveRecord::Migration
+  def self.up
+    create_table :statements do |t|
+      t.integer  :account_id, :null => false
+      t.date     :occurred_on, :null => false
+      t.integer  :starting_balance
+      t.integer  :ending_balance
+      t.datetime :balanced_at
+      t.timestamps
+    end
+
+    add_index :statements, %w(account_id occurred_on)
+
+    add_column :account_items, :statement_id, :integer
+    add_index :account_items, %w(statement_id occurred_on)
+  end
+
+  def self.down
+    drop_table :statements
+
+    remove_index :account_items, %w(statement_id occurred_on)
+    remove_column :account_items, :statement_id
+  end
+end
diff --git a/db/schema.rb b/db/schema.rb
index f49ca92..c6abdca 100644
--- a/db/schema.rb
+++ b/db/schema.rb
@@ -9,17 +9,19 @@
 #
 # It's strongly recommended to check this file into your version control system.
 
-ActiveRecord::Schema.define(:version => 20090404154634) do
+ActiveRecord::Schema.define(:version => 20090421221109) do
 
   create_table "account_items", :force => true do |t|
-    t.integer "event_id",    :null => false
-    t.integer "account_id",  :null => false
-    t.integer "amount",      :null => false
-    t.date    "occurred_on", :null => false
+    t.integer "event_id",     :null => false
+    t.integer "account_id",   :null => false
+    t.integer "amount",       :null => false
+    t.date    "occurred_on",  :null => false
+    t.integer "statement_id"
   end
 
   add_index "account_items", ["account_id", "occurred_on"], :name => "index_account_items_on_account_id_and_occurred_on"
   add_index "account_items", ["event_id"], :name => "index_account_items_on_event_id"
+  add_index "account_items", ["statement_id", "occurred_on"], :name => "index_account_items_on_statement_id_and_occurred_on"
 
   create_table "accounts", :force => true do |t|
     t.integer  "subscription_id",                :null => false
@@ -75,6 +77,18 @@
   add_index "line_items", ["bucket_id", "occurred_on"], :name => "index_line_items_on_bucket_id_and_occurred_on"
   add_index "line_items", ["event_id"], :name => "index_line_items_on_event_id"
 
+  create_table "statements", :force => true do |t|
+    t.integer  "account_id",       :null => false
+    t.date     "occurred_on",      :null => false
+    t.integer  "starting_balance"
+    t.integer  "ending_balance"
+    t.datetime "balanced_at"
+    t.datetime "created_at"
+    t.datetime "updated_at"
+  end
+
+  add_index "statements", ["account_id", "occurred_on"], :name => "index_statements_on_account_id_and_occurred_on"
+
   create_table "subscriptions", :force => true do |t|
     t.integer "owner_id", :null => false
   end
diff --git a/public/javascripts/money.js b/public/javascripts/money.js
index bc7bf2a..9679eac 100644
--- a/public/javascripts/money.js
+++ b/public/javascripts/money.js
@@ -1,21 +1,22 @@
 var Money = {
-  dollars: function(cents) {
-    return (Math.abs(cents) / 100).toFixed(2);
+  dollars: function(cents, keepNegative) {
+    cents = keepNegative ? cents : Math.abs(cents);
+    return (cents / 100).toFixed(2);
   },
 
   parse: function(field, keepNegative) {
-    return Money.parseValue($F(field));
+    return Money.parseValue($F(field), keepNegative);
   },
 
   /* don't want to use parseFloat, because we can be subject to
    * floating point round-off */
   parseValue: function(string, keepNegative) {
     var value = string.gsub(/[^-+\d.]/, "");
-    var match = value.match(/^([-+]?)(\d*)(?:\.(\d+))?$/);
+    var match = value.match(/^([-+]?)(\d*)(?:\.(\d*))?$/);
 
     if(!match) return 0;
 
-    var sign = (match[1] == "-" && keepNegative) ? -1 : 1;
+    var sign = ((match[1] == "-") && keepNegative) ? -1 : 1;
     if(match[2].length > 0)
       var dollars = parseInt(match[2]);
     else
@@ -31,5 +32,45 @@ var Money = {
     }
 
     return sign * (dollars * 100 + cents);
+  },
+
+  format: function(field) {
+    return Money.formatValue(Money.parse(field, true));
+  },
+
+  formatValue: function(cents) {
+    var sign = cents < 0 ? -1 : 1;
+    var source = String(Math.abs(cents));
+    var result;
+
+    if(source.length > 2) {
+      result = "." + source.slice(-2);
+      source = source.slice(0,-2);
+    } else if(source.length == 2) {
+      result = "." + source;
+      source = "";
+    } else if(source.length == 1) {
+      result = ".0" + source;
+      source = "";
+    } else {
+      result = ".00";
+    }
+
+    while(source.length > 3) {
+      result = "," + source.slice(-3) + result;
+      source = source.slice(0,-3);
+    }
+
+    if(source.length > 0) {
+      result = source + result;
+    } else if(result[0] == ".") {
+      result = "0" + result;
+    }
+
+    if(sign < 0) {
+      result = "-" + result;
+    }
+
+    return result;
   }
 }
diff --git a/public/javascripts/statements.js b/public/javascripts/statements.js
new file mode 100644
index 0000000..e9d4af2
--- /dev/null
+++ b/public/javascripts/statements.js
@@ -0,0 +1,71 @@
+var Statements = {
+  clickItem: function(id) {
+    $('check_account_item_' + id).click();
+  },
+
+  toggleCleared: function(id) {
+    var checked = $('check_account_item_' + id).checked;
+    var amount = parseInt($('amount_account_item_' + id).innerHTML);
+    var subtotalField = $('account_item_' + id).up('fieldset').down('.subtotal_dollars');
+    var subtotal = Money.parseValue(subtotalField.innerHTML, true);
+
+    if(checked) {
+      $('account_item_' + id).addClassName('cleared');
+      subtotalField.innerHTML = "$" + Money.formatValue(subtotal + amount);
+    } else {
+      $('account_item_' + id).removeClassName('cleared');
+      subtotalField.innerHTML = "$" + Money.formatValue(subtotal - amount);
+    }
+
+    Statements.updateBalances();
+  },
+
+  startingBalance: function() {
+    if(!Statements.cachedBalance)
+      Statements.cachedBalance = Money.parseValue($('starting_balance').innerHTML, true);
+    return Statements.cachedBalance;
+  },
+
+  endingBalance: function() {
+    return Money.parse($('statement_ending_balance'), true);
+  },
+
+  settled: function() {
+    return $$('.subtotal_dollars').inject(0, function(sum, span) {
+      return sum + Money.parseValue(span.innerHTML, true);
+    });
+  },
+
+  remaining: function() {
+    return Statements.startingBalance() + Statements.settled() - Statements.endingBalance();
+  },
+
+  updateBalances: function() {
+    var ending = $('statement_ending_balance');
+    ending.value = Money.format(ending);
+
+    var remaining = Statements.remaining();
+    var remainingText = Money.formatValue(remaining);
+
+    ['deposits', 'checks', 'expenses'].each(function(section) {
+      if($(section)) {
+        var span = $$("#" + section + " .remaining_dollars").first();
+
+        if(remaining == 0)
+          span.addClassName("balanced");
+        else
+          span.removeClassName("balanced");
+
+        span.innerHTML = "$" + remainingText;
+      }
+    })
+
+    if(remaining == 0) {
+      $('balanced').show();
+      $('actions').hide();
+    } else {
+      $('balanced').hide();
+      $('actions').show();
+    }
+  }
+}
diff --git a/public/stylesheets/money.css b/public/stylesheets/money.css
index dfe17bc..7cf14f5 100644
--- a/public/stylesheets/money.css
+++ b/public/stylesheets/money.css
@@ -617,3 +617,138 @@ body.login .notice {
 #blankslate p.create a {
   text-decoration: underline;
 }
+
+/* ------------------------------------------------------------------ *
+ * ACCOUNT RECONCILIATION
+ * ------------------------------------------------------------------ */
+
+.statement table.general {
+  margin: 0;
+  margin-bottom: 1em;
+}
+
+.statement table.general th {
+  font-size: 80%;
+  color: #777;
+  white-space: nowrap;
+}
+
+.statement table.general td.occurred_on,
+.statement table.general th.occurred_on {
+  width: 40%;
+}
+
+.statement table.general td.starting_balance,
+.statement table.general th.starting_balance {
+  width: 20%;
+  text-align: right;
+}
+
+.statement table.general td.ending_balance,
+.statement table.general th.ending_balance {
+  width: 40%;
+  text-align: right;
+}
+
+.statement fieldset {
+  padding: 0;
+}
+
+.statement .subtotal {
+  border-top: 1px solid #ccc;
+  font-size: 80%;
+}
+
+.statement .settled {
+  float: right;
+  padding: 0.5em;
+}
+
+.statement .remaining {
+  float: left;
+  padding: 0.5em;
+}
+
+.statement .remaining .balanced {
+  color: #070;
+  font-weight: bold;
+}
+
+.uncleared {
+  margin: 0.5em;
+}
+
+.uncleared.expenses {
+  height: 12em;
+  overflow: auto;
+}
+
+.uncleared.checks {
+  height: 12em;
+  overflow: auto;
+}
+
+.uncleared.deposits {
+  height: 5em;
+  overflow: auto;
+}
+
+.uncleared table {
+  margin: 0;
+}
+
+.uncleared tr {
+  height: 1.4em;
+  cursor: pointer;
+}
+
+.uncleared td {
+  font-size: 80%;
+  vertical-align: bottom;
+}
+
+.uncleared td.checkbox {
+  width: 1px;
+  padding-right: 1em;
+}
+
+.uncleared td.date {
+  color: black;
+  padding-right: 1em;
+}
+
+.uncleared td.check {
+  width: 1px;
+  padding-right: 1em;
+}
+
+.uncleared tr.cleared td {
+  text-decoration: line-through;
+  color: #777;
+}
+
+.uncleared td {
+  padding: 0.2em;
+}
+
+.uncleared input {
+  margin: 0;
+}
+
+#balanced {
+  border: 1px solid #aca;
+  background: #cfc;
+  margin: 1em 0;
+}
+
+#balanced h3 {
+  margin: 0;
+  border-bottom: 1px solid #aca;
+  background: #070;
+  color: white;
+  padding: 0.5em;
+}
+
+#balanced p {
+  margin: 1em;
+}
diff --git a/test/fixtures/account_items.yml b/test/fixtures/account_items.yml
index 242df43..ad53111 100644
--- a/test/fixtures/account_items.yml
+++ b/test/fixtures/account_items.yml
@@ -7,6 +7,7 @@ john_checking_starting_balance:
   account: john_checking
   amount: 100000
   occurred_on: <%= 60.days.ago.to_date.to_s(:db) %>
+  statement: john
 
 john_lunch_mastercard:
   event: john_lunch
@@ -25,6 +26,7 @@ john_bill_pay_checking:
   account: john_checking
   amount: -775
   occurred_on: <%= 58.days.ago.utc.to_s(:db) %>
+  statement: john
 
 john_bill_pay_mastercard:
   event: john_bill_pay
diff --git a/test/fixtures/statements.yml b/test/fixtures/statements.yml
new file mode 100644
index 0000000..ff4d212
--- /dev/null
+++ b/test/fixtures/statements.yml
@@ -0,0 +1,34 @@
+# --------------------------------------------------------------
+# john
+# --------------------------------------------------------------
+
+john:
+  account: john_checking
+  occurred_on: <%= 2.weeks.ago.to_date.to_s(:db) %>
+  starting_balance: 0
+  ending_balance: 99225
+  balanced_at: <%= 1.week.ago.to_s(:db) %>
+  created_at: <%= 1.week.ago.to_s(:db) %>
+  updated_at: <%= 1.week.ago.to_s(:db) %>
+
+john_pending:
+  account: john_checking
+  occurred_on: <%= Date.today %>
+  starting_balance: 99225
+  ending_balance: 125392
+  balanced_at: ~
+  created_at: <%= Time.now.to_s(:db) %>
+  updated_at: <%= Time.now.to_s(:db) %>
+
+# --------------------------------------------------------------
+# tim
+# --------------------------------------------------------------
+
+tim:
+  account: tim_checking
+  occurred_on: <%= 1.week.ago.to_date.to_s(:db) %>
+  starting_balance: 0
+  ending_balance: 123456
+  balanced_at: ~
+  created_at: <%= 1.week.ago.to_s(:db) %>
+  updated_at: <%= 1.week.ago.to_s(:db) %>
diff --git a/test/functional/statements_controller_test.rb b/test/functional/statements_controller_test.rb
new file mode 100644
index 0000000..2161b1e
--- /dev/null
+++ b/test/functional/statements_controller_test.rb
@@ -0,0 +1,102 @@
+require 'test_helper'
+
+class StatementsControllerTest < ActionController::TestCase
+  setup :login_default_user
+
+  test "index for inaccessible account should 404" do
+    get :index, :account_id => accounts(:tim_checking).id
+    assert_response :missing
+  end
+
+  test "index should list only balanced statements" do
+    get :index, :account_id => accounts(:john_checking).id
+    assert_response :success
+    assert_template "statements/index"
+    assert_equal [statements(:john)], assigns(:statements)
+  end
+
+  test "new for inaccessible account should 404" do
+    get :new, :account_id => accounts(:tim_checking).id
+    assert_response :missing
+  end
+
+  test "new should build template record and render" do
+    get :new, :account_id => accounts(:john_checking).id
+    assert_response :success
+    assert_template "statements/new"
+    assert assigns(:statement).new_record?
+  end
+
+  test "create for inaccessible account should 404" do
+    assert_no_difference "Statement.count" do
+      post :create, :account_id => accounts(:tim_checking).id,
+        :statement => { :occurred_on => Date.today, :ending_balance => 1234_56 }
+      assert_response :missing
+    end
+  end
+
+  test "create should create new record and redirect to edit" do
+    assert_difference "accounts(:john_checking, :reload).statements.size" do
+      post :create, :account_id => accounts(:john_checking).id,
+        :statement => { :occurred_on => Date.today, :ending_balance => 1234_56 }
+      assert_redirected_to edit_statement_url(assigns(:statement))
+    end
+  end
+
+  test "show for inaccessible statement should 404" do
+    get :show, :id => statements(:tim).id
+    assert_response :missing
+  end
+
+  test "show should load statement record and render" do
+    get :show, :id => statements(:john).id
+    assert_response :success
+    assert_template "statements/show"
+    assert_equal statements(:john), assigns(:statement)
+  end
+
+  test "edit for inaccessible statement should 404" do
+    get :edit, :id => statements(:tim).id
+    assert_response :missing
+  end
+
+  test "edit should load statement record and render" do
+    get :edit, :id => statements(:john).id
+    assert_response :success
+    assert_template "statements/edit"
+    assert_equal statements(:john), assigns(:statement)
+  end
+
+  test "update for inaccessible statement should 404" do
+    put :update, :id => statements(:tim).id,
+      :statement => { :occurred_on => statements(:tim).occurred_on,
+        :ending_balance => statements(:tim).ending_balance,
+        :cleared => [account_items(:tim_checking_starting_balance).id] }
+    assert_response :missing
+    assert statements(:tim, :reload).account_items.empty?
+  end
+
+  test "update should load statement and update statement and redirect" do
+    assert statements(:john_pending).account_items.empty?
+    put :update, :id => statements(:john_pending).id,
+      :statement => { :occurred_on => statements(:john_pending).occurred_on,
+        :ending_balance => statements(:john_pending).ending_balance,
+        :cleared => [account_items(:john_lunch_again_checking).id] }
+    assert_redirected_to account_url(statements(:john_pending).account)
+    assert_equal [account_items(:john_lunch_again_checking)],
+      statements(:john_pending, :reload).account_items
+  end
+
+  test "destroy for inaccessible statement should 404" do
+    assert_no_difference "Statement.count" do
+      delete :destroy, :id => statements(:tim).id
+      assert_response :missing
+    end
+  end
+
+  test "destroy should load and destroy statement and redirect" do
+    delete :destroy, :id => statements(:john).id
+    assert_redirected_to account_url(statements(:john).account)
+    assert !Statement.exists?(statements(:john).id)
+  end
+end
diff --git a/test/unit/statement_test.rb b/test/unit/statement_test.rb
new file mode 100644
index 0000000..a4e69f7
--- /dev/null
+++ b/test/unit/statement_test.rb
@@ -0,0 +1,80 @@
+require 'test_helper'
+
+class StatementTest < ActiveSupport::TestCase
+  test "creation with ending balance as dollars should be translated to cents" do
+    statement = accounts(:john_checking).statements.create(:occurred_on => Date.today,
+      :ending_balance => "1,234.56")
+    assert_equal 1_234_56, statement.ending_balance
+  end
+
+  test "creation with cleared ids should set statement id for given account items" do
+    items = [:john_checking_starting_balance, :john_bill_pay_checking].map { |i| account_items(i).id }
+
+    statement = accounts(:john_checking).statements.create(
+      :occurred_on => Date.today, :ending_balance => 1_234_56, :cleared => items)
+
+    assert_equal items, statement.account_items.map(&:id)
+  end
+
+  test "creation with cleared ids should filter out items for different accounts" do
+    items = [:john_checking_starting_balance, :john_bill_pay_checking].map { |i| account_items(i).id }
+    bad_items = items + [account_items(:john_lunch_mastercard).id]
+
+    statement = accounts(:john_checking).statements.create(
+      :occurred_on => Date.today, :ending_balance => 1_234_56, :cleared => bad_items)
+
+    assert_equal items, statement.account_items.map(&:id)
+  end
+
+  test "balanced_at should not be set when no items have been given" do
+    statement = accounts(:john_checking).statements.create(:occurred_on => Date.today,
+      :ending_balance => 1_234_56)
+    assert_nil statement.balanced_at
+  end
+
+  test "balanced_at should be set automatically when items all balance" do
+    statements(:john).destroy # get this one out of the way
+
+    items = [:john_checking_starting_balance, :john_bill_pay_checking].map { |i| account_items(i).id }
+
+    statement = accounts(:john_checking).statements.create(
+      :occurred_on => Date.today, :ending_balance => 992_25, :cleared => items)
+
+    assert_not_nil statement.balanced_at
+    assert (Time.now - statement.balanced_at) < 1
+  end
+
+  test "balanced_at should be cleared automatically when items do not balance" do
+    items = [:john_checking_starting_balance, :john_bill_pay_checking].map { |i| account_items(i).id }
+
+    statement = accounts(:john_checking).statements.create(:occurred_on => Date.today,
+      :ending_balance => 1_234_56)
+    statement.balanced_at = Time.now.utc
+    statement.save
+
+    assert_not_nil statement.reload.balanced_at
+
+    statement.update_attributes :cleared => items
+    assert_nil statement.reload.balanced_at
+  end
+
+  test "deleting statement should nullify association with account items" do
+    assert statements(:john).account_items.any?
+    assert_equal statements(:john), account_items(:john_checking_starting_balance).statement
+
+    assert_difference "Statement.count", -1 do
+      assert_no_difference "AccountItem.count" do
+        statements(:john).destroy
+      end
+    end
+
+    assert_nil account_items(:john_checking_starting_balance, :reload).statement
+  end
+
+  test "balanced should be true when unsettled balance is zero" do
+    assert statements(:john).balanced?
+    statements(:john).update_attributes :ending_balance => 1234_56,
+      :cleared => statements(:john).account_items.map(&:id)
+    assert !statements(:john).balanced?(true)
+  end
+end