Proof of Cash

Cards (13)

  • 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