PAS 7 & PAS 1

Cash

Type of Restriction
If restriction is current
Example:
"Cash is restricted for use for purchase of Inventory"

Exception:

If restriction is current but for purchase of Non-

Current Assets

Restriction is non-current

Example:
Restriction of cash is for puchase of Inventory
after 2 years

Classifications of Cash
1.Cash on Hand
2. Cash in Bank
3. Cash Equivalents

Component of Cash on Hand

1.) Cash on Hand
2.) Petty Cash

Cash on Hand Expanded

1.) Coins and Currency
2.) Postal Money Order
3.) Traveler's Check
4.) "Checks"
a.) NSF/DAIF Check
b.) Post Dated Check received from Customer
c.) Post Dated Check issued to Supplier
d.) Antedated Check/ Good Check
e.) Stale Check
Note" Check issued in circulation for more than 6months"
f.) Undelivered Checks
Petty Cash Fund
"Aware that there is a high inherent Risk in Petty Cash Fund"

A fund set aside for paying small value expenses, or ineffecient payment and checks
Components:
Coins and Currencies
Replenishment Checks
Accomodation Checks
Adjusted Petty Cash Fund

Other Things to Consider

Vouchers
Supplies-Postage Stamps, Other Supplies , Papers e
IOU
Envelop funding either (Bday Parties, Abuloy, Celebrations)
Note" All which has nothing to do with the petty c

WARNING!!!!!

Cash in Bank
Cases
A. Bank Overdraft
B. Close Bank Account-Assume no Insurance
C. Close Bank Account-Insurance
D. Foreign Bank denominated in Foreign Amounts

SHORTAGE / OVERAGE Petty Cash Fund

Accountability
a.) Imprest balance
b.) Undeposited cash collections
c.) Undeposited check collections
d.) Unclaimed salary
e.)Excess of advance travel
f.) Employee contributions(Do not include if
Envelope is Tampered)
Total

Accountability "Expected"
Accounted "Actual"
Shortage(Overage)

Cash Equivalents
Main Features of Cash Equivalent
#1 Highly Liquid
#2 So Close to Settlement from date of ACQUISITION
#3 Interest Rates or Market Changes will have little to no Material Effect

Examples of Cash Equivalents

A.) Certificate of Deposit
B.) Time Deposit
C.) Money Markets/Commercial Paper
D.) Treasury Bills or Bonds

GENERAL RULE FOR THE COMPUTATION OF THE THREE MONTH RULE

From Date of Acquisition "NOT ISSUANCE"

12 month Money Market Investment, Acquired

Nov 1,2020 will be Paid on January 1,2021

6 Month T Bills, Acquired on July ,2020 and be

Paid on January 2021 as of December the T Bills
will have 1 month before Maturity

Bank Reconciliation

2 Reconciling Items
Bank Reconciling
Book Reconciling

Types of Bank Reconciling items

Deposit in Transit
Outstanding Checks
Errors

NOTE" CERTIFIED CHECKS"

Book Reconciling
Debit Memos

Credit Memos
ERRORS

Illustration:

Cash
Payable to Janus/Account Janus
Payable to Janus/Account Janus
Cash

PROOF OF CASH STATEMENT

DEPOSIT IN TRANSIT
a.) LAST MONTH
b.) CURRENT MONTH
OUTSTANDING CHECK
a.) LAST MONTH
b.) CURRENT MONTH
 Must be Available for Use for the Current Period "Its Usage must not be Restricted by the Client"

Classification Cash MUST BE AVAILABLE FOR USE

"Cash"

of Inventory"

"Non Current Investment"

"Non Current Investment"

Documents
"Physically Accessible"
"Bank Statement"
"Documentations for the Contracts"

Classication
Cash on Hand
Cash on Hand
Cash on Hand

"Either a Payable when issued, Receivable when Received"

"Reclassified as a Receivable"
"Reclassified as a Payable"
Addition to Cash/Reduction if Paid
"Reclassified either a Receivable or Payable" and Reclassified to Cash
ore than 6months"
"If Recorded, Reverse the Entry"
 Fluctuating
k in Petty Cash Fund" X

expenses, or ineffecient payment and checks

Imprest
XXX
XXX
XXX
XXX

These are receipts issued for the use of the petty cash fund
Accounted as Supplies or Expensed

Abuloy, Celebrations)
This must not be part of Petty Cash Fund as this is not the money of the client

If under audit you have suspected that the envelop is either damaged or indicate that it is open. Revaluate the Amount of Coin

Classification
Accounts Payable and Not a Deduction of Cash Amount
Declassified as Cash
Reclassified as a Receivable
Classified as Cash in Peso

Accounted for
a)Remaining currency and coins
b) Envelope containing employee contribution
c) Customers checks accounted
d) Paid expense voucher
e)Replenishment checks
f) IOU

g) Accomodation Check "Check payable to the Petty Cashier Representin

Total

XX
XX
XX
ACQUISITION
ll have little to no Material Effect

N OF THE THREE MONTH RULE

To Date of Settlement Must be 3 months or Lower
Classification
Cash Equivalent

Current Investment

"Deposits in the bank and due to clearing period, would not reflect in the bank statement immedietly "
"Disburstments by the bank and due to the clearing period, would not reflect in the bank statement"
"BASTA"

OUTSTANDING CHECKS THAT IS GUARANTEED BY THE BANK AND IS 100% OF ITS DISBURSTMENT

Deductions of the bank in the entities (Client)

Additions of the bank in the entity(Client)

"BASTA"

DR CR
XX
XX
XX
XX

BANK
LAST MONTH CR

ADD MINUS
ADD

MINUS

BOOK
LAST MONTH Receipts
ust not be Restricted by the Client"

E AVAILABLE FOR USE

 Imprest
/

Petty cash system that requires a FIXED level of petty cash fund

C Custody
A Authorization
R Recording

open. Revaluate the Amount of Coins and Currencies- Note for Overages

ble to the Petty Cashier Representing his/her Salary"

 BANK BOOK
DIT + CR memo +
OC - DR Memo -
ERROR -/+ ERROR -/+
mmedietly " Balance
 DR CURRENT MONTH

ADD

MINUS
ADD MINUS

Disburstment CURRENT MONTH

Accountability XX
Accounted XX
Shortage(Overage) XX