PART OF CASH AND CASH EXCLUDED FROM CASH OR CASH Measurement of cash

EQUIVALENTS EQUIVALENTS Cash is measured at Face

 Current Asset  Restricted cash Value.
 Payroll fund Reverted to  NSF customer check Cash in foreign currency is
 Travel fund accounts  Postdated check measured at current exchange
 Interest fund receivable  Customer check outstanding rate.
 Dividend fund  Equity securities
 Tax fund  BSP Treasury bill - purchased 1 Classification of Investment of
 Sinking fund – due w 1 year year ago excess cash
 Current account  Sinking fund – but if set aside A. Three months or less
 Undeposited collections to settle and due within one classified as cash equivalents
 Cash year after the end of reporting or cash and cash equivalents.
 Checkbook balance period classified as Current B. More than three months
 Undelivered/Unreleased check asset. but within one year classified
drawn – merely/check drawn  Preference share redemption as short-term financial assets
and recorded but not given to fund or temporary investments and
the payee before  Contingent fund presented separately as
 Cash on hand  Insurance fund current assets.
 Demand deposit  Acquisition or construction of C. More than one year
 Petty cash fund PPE fund classified as noncurrent or
o Coin, currency, saving and  Bank overdraft - current long-term investments.
checking account liability
o Check drawn by the entity to  Share investments – do not
the order of the petty cash have maturity
custodian - Replenishment  Refundable deposit for
check returnable containers –
o Check drawn payable to the classified as current asset
order of the petty cash
custodian representing her  Noncurrent Asset
salary - Accommodation check  Bank closed by BSP
 Checks  Bank loan – long term
 Traveler’s check
 Manager’s check Excluded from Petty Cash Fund
 Bank drafts  Vouchers
 Money order  Transportation, gasoline, office
 Cash in bank – current account supplies, postage stamps, &
 Cash in bank – Payroll account due from employees
 Unrestricted cash  Medical supplies, repairs, and
 Cash Equivalents loans to employees
 Money market  “NSF” or insufficient fund
instrument/account/
commercial paper – 3 months DEDUCTIONS TO CASH
of maturity  Postdated customer check –
 BSP Treasury bill – 3 months, check drawn, recorded and
purchase 3 months before already given to the payee but
date of maturity it bears a date subsequent to
 Government treasury bills end of reposting period.
 Time deposit – 3 months of  Check payable
maturity  Compensating balance –
 Certificate of Time Deposit legally restricted, if not legally
 Checking account restricted is part of cash “but
 Preference shares – acquired 3 not added in the total amount
months before redemption to be reported”.
date  NSF customer check
 Investment of excess cash – 3
months or less

CASH AND CASH EQUIVALENTS

BANK RECONCILIATION
Balance per book/ per ledger Balance per bank/unadjusted Proforma reconciliation
Added: Add:
 Note collected by bank/  Deposit in transit Adjusted balance method
Proceeds of note collected  Undeposited collections Book balance xx
 Interest earned on note Less: Outstanding checks Add: Credit memos xx
 Unrecorded customer check Bank error: Total xx
Less: Add: Less: Debit memos xx
 Debit memo o Bank error – erroneous Adjusted book balance XX
 NSF customer check charge
 Bank service charge o Check issued by Y company Bank balance xx
o Bank service charge on NSF charged to X company’s Add: Deposit in transit xx
check account Total xx
o Other bank service charges o Overstatement of Less: Outstanding checks xx
 Customer check charged disbursement Adjusted bank balance XX
back o Stolen check deducted by
 Monthly loan payment bank in error Adjusted balance method
 Unrecorded check Deduct: Balance per book/ ledger xx
 Checkbook printing charge o Bank error – erroneous bank Add: Note collected by bank xx
Book error: credit Total xx
Add: o Amount erroneously credited Less: NSF customer check xx
o Book error- check written by bank to Company X Service charge xx xx
account Adjusted book balance XX
overstated / overstatement
of payment o Erroneous credit to Company
Balance per bank xx
o Customer checked X account
Add: Deposit in transit xx
understated o Understatement of
Total xx
o Understatement of disbursement
Less: Outstanding checks:
collection/ cash receipts Adjusted bank balance
Check No. 001 xx
o Overstatement of creditor Check No. 002 xx xx
check Book reconciling items
Bank error xx
o Check stopped for payment  Return of customer check for
Adjusted bank balance XX
Deduct: insufficient fund
o Entity discovered that it had  Bank service charge
Balance per bank – Jan. 1 xx
drawn and erroneously Deposit in transit xx
recorded a check for ex. P46K Erroneous bank credit
NSF customer check xx
that should have been Bank error – erroneous bank credit
Service charge xx
recorded for P64k
Certified check is no longer Monthly loan payment xx
o Book error – customer
outstanding for reconciliation Balance per bank – Jan. 31 XX
checked overstated /
purposes. Thus, the amount is
overstatement of collection
deducted/ not included from the
o Check written understated/
total outstanding checks.
understatement of payment
Checks that already redeposited and
o Understatement of creditor
cleared is deducted/not included
check
from NSF Checks
o Understatement of checks
drawn
Adjusted book balance
PROOF OF CASH
Adjusted balance method Jan. Receipts Disburse- Feb.
Previous Receipts Disburse- Current ment
month ment month Balance per Book xx xx xx xx
Balance per Bank xx xx xx xx Note collected:
Deposit in transit: January xx (xx)
January xx (xx) February xx xx
February xx xx NSF check:
Outstanding checks: January (xx) (xx)
January (xx) (xx) February xx (xx)
February ___ ___ xx (xx) Service charge:
Adjusted bank balance XX XX XX XX January (xx) (xx)
February ___ ___ xx (xx)
Adj. book balance XX XX XX XX

Balance per Bank - previous month xx Deposits per bank statement xx Proof of cash
Current month deposits xx Deposit in transit – previous month xx - is an expanded
Current month disbursements Deposit in transit – current month xx reconciliation in that it
(xx) Workback – book xx includes proof of
Balance per bank – current month xx Cash receipts per book XX receipts and
Current month Deposit in Transit xx disbursements.
Current month Outstanding checks (xx) Disbursement per bank statement xx
Adjusted bank balance XX Outstanding checks – previous month xx
Workback xx Outstanding checks – current month xx
Adjusted book balance XX Workback – book xx
Cash Disbursement book XX
ACCOUNTS RECEIVABLE
CURRENT ASSETS If collectible beyond one year, Required allowance xx
Trade and other receivables nontrade receivables are Less: credit balance (xx)
 Trade receivables classified as noncurrent assets. Add: debit balance xx
 Accounts receivable  Advances or receivable- if Doubtful accounts expense XX
o Estimated uncollectible collectible beyond one
accounts/Allow. for doubtful year.
accounts/Allow. for bad debts-  Advances to affiliates
asset offset or contra asset,  Subscription Receivable
Credit should be shown
 Customer accounts preferably as a deduction
 Trade debtors from subscribed share
 Trade accounts receivable capital. Not collectible
 Notes Receivable – beyond one year.
nontrade/trade  Creditors accounts- If
 Nontrade receivables debit balances are not
 Employee loans material, an offset may be
 Wage advances made against the
 Income tax refunds creditors accounts with
 Interest payments credit balances and only
 Insurance claims the net accounts payable
 Advances to or receivables from may be presented.
shareholders, directors, officers  Special deposits on
or employees. contract bids
 Advances to suppliers for the
acquisition of merchandise
 Advances to suppliers, officers
due currently – receivables
 Advances to employees,
collectible currently or IOU
 Subscription receivable
 Creditors accounts may have
debit balances as a result of
overpayment or returns and
allowances.
 Deposits that are collectible
currently.
 Accrued income
 Dividend receivable
 accrued rent receivable
 Accrued royalties receivable
 Accrued interest receivable on
bond investment.
 Accrued interest on notes
receivable
 Claims receivable- claims against
common carriers for losses or
damages, claim for rebates and
tax refunds, claim from insurance
entity.
LAND AND BUILDING
LAND
ADD (+)
Option fee for land acquired
Payment for land
Purchase price of land
Mortgage assumed interest accrued
Realtor commission
Legal Fees – title investigation
Realty taxes and documentation
Title guarantee insurance
Special assessment
Clearing, leveling and landfill
Clearing of trees from building site
Land survey
Cost of relocating squatters
DEDUCT (-)
Timber sold (xx)
Cost to be allocated
Escrow fee
Property tax for period prior to acquisition
Real state commission
Option fee for land not acquired
should be treated as outright expense
SUM OF YEARS DIGITS and DECLINING BALANCE
Under double declining
balance, the residual
value is ignored in the
meanwhile.
BUILDING LAND IMPROVEMENTS
ADD (+) ADD (+)
Cost of razing old building Paving of street and sidewalk
Cost of tearing down old building Cost of fencing the property
Demolition of old building on site to make New fence surrounding property
room for construction of new building Driveway, parking bay and safety
Architect fee lighting
Building permit fee Tress, shrubs and other
New building construction cost landscaping
Liability insurance during construction
Temporary building used for construction
activities
Excavation cost / for basement
Payment for building contractor
Payment to city hall
Amount paid to the contractor for the
building constructed
Remodeling and repairs
Interest cost during construction
Contract price for factory building
Safety inspection on building
Safety fence around construction site
Removal of safety fence after completion
of building
DEDUCT (-)
Sale of scrap from old building (xx)
Salvage value of old building
Not Capitalized
Imputed interest on construction
cost