M7

• (E) 4 Types of Cash

  Cash on Hand, Cash in Bank, Cash Fund, Cash Equivalent
• It represents the remaining cash collection of the day waiting to be deposited the following banking day

  Cash on Hand
• Represents it the cash already deposited

  Cash in Bank
• (E) 3 Types of Cash in the Bank

  Savings Account, Checking Account, Combo Account
• It is the account where the money deposited will earn interest income for the meantime while it is not being used

  Savings Account
• It is also called the Demand Deposit or Current Account, Deposits made here does not earn interest

  Checking Account
• It is the combination of both Savings and Checking Account

  Combo Account
• Company cash that has to be maintained at a certain fund to comply with other fund requirements

  Cash Fund
• (E) 3 Types of Cash Fund

  Petty Cash Fund, Change Fund, Dividend Fund
• The fund that caters to small expenditures of the firm

  Petty Cash
• The fund used to maintain loose change to address the concern for small bills and coins

  Change Fund
• The fund used to pay dividends.

  Dividend Fund
• These are short-term and lightly investments that are readily convertible to cash...

  Cash Equivalent
• If the term is three months or less, it is classified as...

  Cash Equivalent
• If the term is more than three months but within one year, it is classified as...

  Short-term / Short-term Investment
• If the term is more than one year, it is classified as...

  Long-term / Long-term Investments
• (E) 3 Risks of Cash in the Organization

  Inherent Risks, Control Risks, System Risks
• Risks that are built-in every organization

  Inherent Risk
• Risks associated with the internal control mechanism adopted by the firm

  Control Risks
• Risks associated with the use of technology in the handling of cash

  System Risks
• (E) 4 Type of Documenting Cash

  Provisional Receipt, Official Receipt, Cash Sales Invoice, Daily Collector's Remittance Slip
• This is used by collectors whether cash or check collection. This receipt should be surrendered by the collector to the office cashier every day.

  Provisional Receipt
• This receipt is used by the office cashier in case of cash payments.

  Official Receipt
• This is the summary of the collection made by the specified collector of the day.

  Daily Collector's Remittance Slip
• (E) 4 Handlers of Cash

  Collector, Cashier, Junior Accountant, General Accountant
• (E) 3 Common Misuse of Cash

  Lapping, Kiting, Fraudulent Documentaries and Evidences
• When a check is drawn from one depository bank is deposited in another depository bank at the end of the month or year.

  Kiting
• This is the misappropriating collection from one customer and concealing this defalcation by applying a subsequent collection made from another customer

  Lapping
• The making of documents and pieces od evidences that are not true

  Fraudulent Documentaries and Evidences
• (4) Good practices in Controlling Cash

  Establish, Identify, Routinely, Prep. of Strategic Plan