Types of Cash:

Cash oh Hand, Cash in Bank, Cash Funds, Cash Equivalents.

1. Cash on Hand- Cash Items in the possession of an entity.

- Coins and Currencies
- Customer’s, Manager’s, Traveler’s Checks
- Money Orders

2. Cash Funds- Include cash funds for operating and/or short-term purposes.
- Petty Cash Fund
- Revolving Fund
- Payroll Fund
- Change Fund
- Dividend Fund
- Tax Fund
- Interest Fund

! Does not include funds for long-term purposes such as:

- PPE Funds and Sinking Fund

Cash Equivalents- includes all investments acquired within 3 months before their maturity date.
- Treasury Bills/Bonds purchased 3 months before maturity.
- Time deposits acquired 3 months before maturity.
- Commercial papers and money market instruments acquired 3 months before maturity.

! NOT INCLUDED
- Postdated Check
- IOUs or advances to employees
- Plant expansion fund
- Depreciation Fund
- Preference share redemption fund
- Contingency Fund
- Insurance Fund

Bank Reconciliation Statement and Proof of Cash

Bank Reconcilation

Cash In Bank :
Cash receipts > deposited altogether
Cash Payments > made through checks
Sources of details about cash-in-bank
- Cash-in-bank ledger account of the entity.
- Bank statement issued by the bank

Bank Statement:
> Increase in entity's cash > credit
> decrease in entity's cash > debit

Ledger:
> increase in cash > debit
> decrease in cash > credit

A bank reconciliation statement is prepared by an entity to reconcile the cash-in-bank account balance
in the entity's books versus the balance as reported by the bank in the bank statement.

Bank balance reconciling items

Deposit in transit (nakaconnect sa bank)

ADD Deposit in transit- Cash that has been received by an entity and was recorded in the cash-in-bank
account balance as a deposit. However, this deposit that has been sent to the bank is not yet processed
and posted by the bank, thus not reflecting in the bank statement.
- recorded na sa accounting records sa ledger pero in process parin or hindi pa nagrereflect sa bank
statement

DEDUCT Outstanding Checks

Checks that the company has issued and was recorded as a credit entry in the entity's cash-in-bank
account. However, these checks were not yet presented for payment and has not yet cleared from the
bank account from which it is drawn.
- the check is not yet presented for payment by the one who holds it.

ADD or DEDUCT depends on the situation BANK ERRORS

Erroneous debits and credits by the bank in the entity's account.