DON HONORIO VENTURA STATE UNIVERSITY

COLLEGE OF BUSINESS STUDIES

Bacolor, Pampanga

CHAPTER 4 PART 2- PROOF OF CASH

LEARNING OBJECTIVES:

At the end of this chapter, the student should be able to:

1. Define Proof of Cash

2. To illustrate Proof of Cash

PROOF OF CASH

It is an expanded reconciliation in that it includes proof of receipts and disbursements. This method
may be useful in discovering possible discrepancies in handling cash particularly when cash
receipts have been recorded but have not been deposited.

A four-column worksheet is necessary in the preparation of proof of cash.

Illustrative Problem:

January 31 February 28

Balance per book 50,000 70,000

Balance per bank 84,000 124,000

Book Debits 200,000

Book Credits 180,000

Bank Debits 130,000

Bank Credits 170,000

Deposits in Transit 40,000

Outstanding Checks 65,000

NSF Check 5,000 10,000

Service Charge 1,000 -

Note Collected by the bank 15,000 20,000

The proof of cash pertains to the receipts and disbursements for the current month of February.

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 DON HONORIO VENTURA STATE UNIVERSITY
COLLEGE OF BUSINESS STUDIES
Bacolor, Pampanga

CHEOLJONG COMPANY
PROOF OF CASH
FOR THE MONTH OF FERBUARY
Jan-31 Receipts Disbursements Feb-28
Balance per book xx xx xx xx
Note Collected
January xx (xx)
February xx xx
NSF Check
January (xx) (xx)
February xx (xx)
Service Charge
January (xx) (xx)

Adjusted Book Balance 0 0 0 0

Balance per bank xx xx xx xx

Deposits in Transit
January xx (xx)
February xx xx
Outstanding Checks
January (xx) (xx)
February xx (xx)

Adjusted Book Balance 0 0 0 0

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 DON HONORIO VENTURA STATE UNIVERSITY
COLLEGE OF BUSINESS STUDIES
Bacolor, Pampanga

CHEOLJONG COMPANY
PROOF OF CASH
FOR THE MONTH OF FERBUARY
Jan-31 Receipts Disbursements Feb-28
Balance per book 50,000 200,000 180,000 70,000
Note Collected
January 15,000 -15,000
February 20,000 20,000
NSF Check
January -5,000 -5,000
February 10,000 -10,000
Service Charge
January -1,000 -1,000

Adjusted Book Balance 59,000 205,000 184,000 80,000

Balance per bank 84,000 170,000 130,000 124,000

Deposits in Transit
January 40,000 -40,000
February 75,000 75,000
Outstanding Checks
January -65,000 -65,000
February 119,000 -119,000

Adjusted Book Balance 59,000 205,000 184,000 80,000

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 DON HONORIO VENTURA STATE UNIVERSITY
COLLEGE OF BUSINESS STUDIES
Bacolor, Pampanga

REFERENCES:

Millan, Zeus Vernon. (2020). Intermediate Accounting 1A. Baguio City: Bandolin Enterprise

Valix Conrado T & Valix Christian Aris M. (2020). Intermediate Accounting. Manila: GIC
Enterprises & Co. Inc.

CPAR, RESA, ICARE Review Materials in Intermediate Accounting or Financial Accounting

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