Cash and Cash Equivalent

 CASH
- includes money and other negotiable instrument that is payable in money and acceptable by the bank
for deposit and immediate credit. It includes cash on hand, demand deposits and other items that are
UNRESTRICTED for use in the current operations.

1. CASH ON HAND
a) Customer’s check awaiting deposit
b) Undeposited Collections (bills and coins)
c) Traveller’s check
d) Cashier’s/Official/Treasurer/Manager’s check
e) Postal Money Order
f) Bank Drafts
2. CASH IN BANK
a) Demand deposit/commercial deposit/ current account/ checking account
b) savings deposit
3. CASH FUND FOR CURRENT OPERATIONS
a) Change fund
b) Payroll fund
c) Purchasing fund (for purchase of inventory)
d) Revolving fund
e) Interest fund
f) Petty cash fund
g) Dividend fund
h) Tax fund
4. FUND FOR NON-CURRENT OPERATIONS
a) Pension fund – generally non-current investment but if the related liability is current, then
Pension Fund is current and part of cash.
b) Preferred Redemption Fund – non-current investment; if redemption is within one year, Cash
Equivalent.
c) Acquisition of PPE – always non-current even if expected to be disbursed next year.
d) Contingent Fund – Non-current investment
e) Insurance Fund – Non-current investment
f) Sinking Fund – if liability is current, then form part of cash.

 CASH EQUIVALENT
- short-term and highly liquid investments that are readily convertible into cash and so near their maturity
that they present insignificant risk of changes in value because of changes in interest rate.
- ACQUIRED 3 months BEFORE maturity

1. Time deposit
2. Money market instrument/Commercial paper
3. Treasury bills
 T-bills – (maturity) 90 days to less than a year
 T-notes – 1 year to 10 years
 T-bonds – 10 years or more
*if silent:
a) Treasury note – assumed investment
b) Cash in money market account – Cash Equivalent
c) Time deposit – Cash Equivalent

*PETTY CASH FUND:

Petty cash accounted for:

Bills and Coins (physical count) XX
+ Checks for deposit XX
+ Stale checks (if any) XX
+ Vouchers paid XX
TOTAL XX
Less:
Petty Cash accountabilities:
PCF Balance (beg) XX
+ Stale checks (if any) XX (XX)
*Shortage/Overage XX

*PCF @ END = Bills and Coins + Replenishment Check