Proof of Cash

• Two-Date Bank Reconciliation


  A bank reconciliation that involves two dates
• Two-Date Bank Reconciliation


  • Procedures followed are the same with that of a one-date reconciliation
  • Becomes complicated only when certain facts or data are omitted
• Facts or data that can be omitted in a two-date reconciliation

  • Book balance - Beginning and Ending
  • Bank balance - Beginning and Ending
  • Deposit in Transit - Beginning and Ending
  • Outstanding Checks - Beginning and Ending
• Computation of Book Balance

  1. Balance per book - Beginning

  2. Add: Book debits during the month

  3. Less: Book credits during the month

  4. Balance per book - Ending
• Computation of Bank Balance

  1. Balance per bank - Beginning

  2. Add: Bank credits during the month

  3. Less: Bank debits during the month

  4. Balance per bank - Ending
• Computation of Deposit in Transit

  1. Deposit in Transit - Beginning

  2. Add: Cash receipts deposited during the month

  3. Less: Deposits acknowledged by the bank during the month

  4. Deposit in Transit - Ending
• Computation of Outstanding Checks

  1. Outstanding Checks - Beginning

  2. Add: Checks drawn by depositor during the month

  3. Less: Checks paid by the bank during the month

  4. Outstanding Checks - Ending
• Proof of Cash


  • An expanded reconciliation that includes proof of receipts and disbursements
  • Useful in discovering possible discrepancies in handling cash particularly when cash receipts have been recorded but have not been deposited
• Forms of Proof of Cash

  • Adjusted balance method
  • Book to bank method
  • Bank to book method
• Proof of Cash: Adjusted Balance Method

  1. Balance per Book

  2. Add/Less: Credit Memo - Previous Month, Credit Memo - Current Month, Debit Memo - Previous Month, Debit Memo - Current Month

  3. Adjusted Book Balance
• Proof of Cash: Adjusted Balance Method

  1. Balance per Bank

  2. Add/Less: Deposit in Transit - Previous Month, Deposit in Transit - Current Month, Outstanding Checks - Previous Month, Outstanding Checks - Current Month

  3. Adjusted Bank Balance
• Proof of Cash: Book to Bank Method

  1. Balance per Book

  2. Add/Less: Credit Memo - Previous Month, Credit Memo - Current Month, Debit Memo - Previous Month, Debit Memo - Current Month, Deposit in Transit - Previous Month, Deposit in Transit - Current Month, Outstanding Checks - Previous Month, Outstanding Checks - Current Month

  3. Balance per Bank
• Proof of Cash: Bank to Book Method

  1. Balance per Bank

  2. Add/Less: Credit Memo - Previous Month, Credit Memo - Current Month, Debit Memo - Previous Month, Debit Memo - Current Month, Deposit in Transit - Previous Month, Deposit in Transit - Current Month, Outstanding Checks - Previous Month, Outstanding Checks - Current Month

  3. Balance per Book