COMPONENTS OF CASH

 Undeposited Currency and Coins

 Petty cash
 Undeposted negotiable checks
 Foreign currency
 Bank drafts
 Money orders
 Other short term funds for current operations
 Traveler’s checks
 Cashier’s checks

BANK OVERDRAFT – presented as Liability. But if repayable on Demand, that forms part of
entity’s cash management, it should be a component of Cash

OUTSTANDING CHECKS – checks already recorded by the depositor as CASH

DISBURSEMENTS but not yet reflected on the bank statement

a. Checks drawn and already given to payyes but not yet presented for payment
b. CERTIFIED CHECKS – one where the bank has stamped on its face the word
“Accepted” or “Certified” indicating sufficiency of funds. DEDUCTED TO OUSTANDING
CHECKS

COMPENSATING BALANCE

Unrestricted – cash

Restricted – Short term is Current assets but not CCE; Long term is a Non-Current Assets

UNDELIVERED/ UNRELEASED CHECK

Drawn and recorded but not given to the payee before end of reposting period

Must be added back to Cash

STALE CHECK

Check not encashed by the payee within a relatively long period of time, a check becomes stale
if not encashed within 6 months

Must be added back to CASH

POSTDATED CHECK DELIVERD – Check drawn, recorded and already given to employees
but ut bears a date subsequent to end of reporting period; must be added back to CASH

BANK RECONCILITATION

Unadjusted Bank Balance xx xx Unadjusted Book Balance

Undeposited collection/DIT xx xx Credit Memo

Outstanding checks (xx) (xx) Debit Memo

Bank errors xx/(xx) xx/(xx) Book errors

Adjusted Balance xx xx

SHORTAGE/OVERAGE

Debit – shortage  receivable for employee (with evidence)

 Miscellaneous Expense (immaterial/ not fault of custodian)

Credit – Overage  payable

Miscellaneous Income

PETTY CASH FUND

Establish PCF and Increase PCF  Petty Cash Fund xx

Cash in bank xx

Replinshment  Expenses xx

Cash in bank xx