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Proof of Cash

The document outlines the objectives and procedures for preparing a two-date bank reconciliation, including the computation of deposits in transit and outstanding checks. It explains the importance of reconciling cash receipts and disbursements between the ledger and bank statement, as well as the nature of proof of cash. Additionally, it describes three methods for proof of cash: adjusted balance, book to bank, and bank to book.

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9 views23 pages

Proof of Cash

The document outlines the objectives and procedures for preparing a two-date bank reconciliation, including the computation of deposits in transit and outstanding checks. It explains the importance of reconciling cash receipts and disbursements between the ledger and bank statement, as well as the nature of proof of cash. Additionally, it describes three methods for proof of cash: adjusted balance, book to bank, and bank to book.

Uploaded by

isecaelia.aaa
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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PROOF OF CASH

OBJECTIVES
TO BE ABLE TO PREPARE A TWO-DATE BANK RECONCILIATION.

TO KNOW THE COMPUTATION OF DEPOSITS IN TRANSITS AND OUTSTANDING


CHECKS.

TO KNOW THE RECONCILIATION OF CASH RECEIPTS PER LEDGER WITH CASH


RECEIPTS PER BANK STATEMENT.

TO KNOW THE RECONCILIATION OF CASH DISBURSEMENTS PER LEDGER WITH


CASH DISBURSEMENTS PER BANK STATEMENT.

TO UNDERSTAND THE NATURE OF PROOF OF CASH.

TO BE ABLE TO PREPARE A RECONCILIATION SHOWING PROOF OF CASH.


TWO-DATE BANK
RECONCILIATION
THE BANK RECONCILIATION IS SO CALLED "TWO- DATE" BECAUSE
IT LITERALLY INVOLVES TWO DATES.

TWO-DATE RECONCILIATION BECOMES COMPLICATED ONLY


WHEN A CERTAIN FACTS OR DATA ARE OMITTED. BUT IF ALL FACTS
ARE AVAILABLE, THE RECONCILIATION STATEMENTS WILL SIMPLY BE
PREPARED AS OF THE TWO DATES REQUIRED.
THE OMITTED INFORMATION MAY BE ANY ONE OR A
COMBINATION OF THE FOLLOWING:

A.BOOK BALANCE - BEGINNING AND ENDING


B. BANK BALANCE - BEGINNING AND ENDING
C.DEPOSITS IN TRANSIT - BEGINNING AND ENDING
D.OUTSTANDING CHECKS - BEGINNING AND ENDING
COMPUTATION OF
BOOK BALANCE
BOOK DEBITS
CASH RECEIPTS OR ALL ITEMS
DEBITED TO THE CASH IN BANK ACCOUNT.

BOOK CREDITS
CASH DISBURSEMENT OR ALL
ITEMS CREDITED TO THE CASH IN THE BANK
ACCOUNT.
COMPUTATION OF
BANK BALANCE
BANK CREDITS
ALL ITEMS CREDITED TO THE
ACCOUNT OF THE DEPOSITOR WHICH INCLUDE
DEPOSITS ACKNOWLEDGE BY BANK AND
CREDIT MEMOS.

BANK DEBITS
ALL ITEMS DEBITED TO THE
ACCOUNT OF THE DEPOSITOR WHICH INCLUDE
CHECKS PAID BY BANK AND DEBIT MEMOS.
COMPUTATION OF
DEPOSITS IN TRANSIT AND
OUTSTANDING CHECKS
ILLUSTRATION
COMPUTATION OF
BOOK AND BANK BALANCE
COMPUTATION
OF DEPOSITS IN TRANSIT
COMPUTATION OF
OUTSTANDING CHECKS
PROOF OF CASH
- INCLUDES PROOF OF RECEIPTS AND DISBURSEMENTS.

- IT IS USEFUL IN DISCOVERING POSSIBLEDISCREPANCIES IN


HANDLING CASH PARTICULARLY WHEN CASH RECEIPTS HAVE
BEEN RECORDED BUT HAVE NOT BEEN DEPOSITED.
3 FORMS OF
PROOF OF CASH
A. ADJUSTED BALANCE METHOD
B. BOOK TO BANK METHOD
C. BANK TO BOOK METHOD
THANK YOU

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