SITUATIONS

POINT OF Journ
NO. CASH ITEMS DESCRIPTION VIEW Nature of Situations Account Na

. Post-dated check A check that is written with a future

date.
a) Customer's postdated A check received from customer that Recipient . Recorded on date of Cash
check bears a date subsequent to the end of receipt
the accounting period. . Not recorded on date of No Entry made
receipt
b) Post-dated check A check that is drawn, recorded and Issuer Accounts Payable
delivered issued to the payee but bears a date Recorded on date of payment
subsequent to the end of the reporting
period.
. NSF Check Recipient . Returned, redeposited, Cash
A no sufficient fund check caused by and cleared on or before
check drawn against insufficient fund reporting date.
(DAIF) or uncleared deposit (DAUD). . Returned but not Cash
redeposited on or before
reporting date.
Issuer . Returned, redeposited, Accounts Payable
and cleared on or before
reporting date.
. Returned but not Accounts Payable
redeposited on or before
reporting date.
. Stale check A check not ecashed by the payee Recipient . Material in amount. Cash
within a relatively long period of time
(until reporting date). . Immaterial in amount. Cash

Issuer . Material in amount. Accounts Payable

. Immaterial in amount. Accounts Payable

. Check with SPO Recipient . Cash

A check with stop payment order due Dispute over goods sold
to various reasons like (1) A check and immediately replaced
mailed to the wrong address, (2) A lost on or before reporting
or stolen check, (3) Insufficient funds date. SPO was lifted on or
in a bank account, (4) A dispute over a before reporting date.
purchase or services rendered. . Cash
Dispute over goods sold
and the customer
returned the goods with
no replacement at all on
or before reporting date.
. Cash
Dispute over services
rendered and immediately
rectified on or before
reporting date. SPO was
lifted on or before
reporting date.
. Cash
Dispute over services
rendered and not rectified
as per client's decision on
or before reporting date.
Client will change the
service contractor.
 Dispute over services
rendered and not rectified
as per client's decision on
or before reporting date.
Client will change the
service contractor.
Issuer . AP/Purchases/Asse
Dispute over goods/asset
purchased and
immediately replaced on
or before reporting date.
SPO was lifted on or
before reporting date.
. AP/Purchases/Asse

Dispute over goods/asset

purchased and
immediately returned the
goods/asset with no
replacement at all on or
before reporting date.
. Undelivered Check A check that is drawn and recorded Issuer Accounts Payable
(unreleased check) but not yet received by the payee on
or before the end of the reporting
period.
 SITUATIONS At Reporting Date EFFECT ON ADJUSTING JOURNAL ENTRY
Journal Entry Made Actual Actual (At Reporting Date)
Account Names Debit Credit Receipt Disb. A L OE WC Account Names

Cash xxx None NE NE NE NE Accounts Receivable

Accounts Receivable xxx Cash
No Entry made None NE NE NE NE No AJE is necessary

Accounts Payable xxx None U U NE NE Cash

Cash xxx Accounts Payable

Cash xxx Collected NE NE NE NE No AJE is necessary

Accounts Receivable xxx

Cash xxx None NE NE NE NE Accounts Receivable

Accounts Receivable xxx Cash

Accounts Payable xxx Paid NE NE NE NE No AJE is necessary

Cash xxx

Accounts Payable xxx None U U NE NE Cash

Cash xxx Accounts Payable

Cash xxx None NE NE NE NE Accounts Receivable

Accounts Receivable xxx Cash
Cash xxx None NE NE NE NE Miscellaneous Expense
Accounts Receivable xxx Cash
Accounts Payable xxx None U U NE NE Cash
Cash xxx Accounts Payable
Accounts Payable xxx None U U NE NE Cash
Cash xxx Miscellaneous income
Cash xxx Collected NE NE NE NE No AJE is required
AR/Sales revenue xxx

Cash xxx None NE NE NE NE Sales Returns

AR/Sales revenue xxx Cash

Cash xxx Collected NE NE NE NE No AJE is required

AR/Service Revenue xxx

Cash xxx None NE NE NE NE Loss or Expense

AR/Service Revenue xxx Cash
AP/Purchases/Asset xxx Paid NE NE NE NE No AJE is required
Cash xxx

AP/Purchases/Asset xxx NE NE NE NE Case

Cash xxx Purchase returns/Asset

Accounts Payable xxx None U U NE NE Cash

Cash xxx Accounts Payable
G JOURNAL ENTRY
eporting Date)
Debit Credit

xxx
xxx

xxx
xxx

xxx
xxx

xxx
xxx

xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx

xxx
xxx

xxx
xxx
xxx
xxx

xxx
xxx
NO. ASSET CLASSIFICATION
. Current Asset Cash on Hand
Cash in Bank
Cash Fund for current 1) Petty Cash Fund
operations
ACCOUNT CASH ITEMS INCLUDED B
1) Undeposited receipts
a) Customer's checks awaiting deposit
(excluding PDC and stale checks)
b) Cash collections (bills and coins)
2) Traveler's checks
Traveler's checks are a form
financial institutions and gen
countries. These checks are
buy goods or services or be
3) Postal Money orders (PMO)
A postal order or postal note
sending money through the
payable at another post offi
known as poundage, is paid
4) Cashier's Checks A cashier’s check is a secure
written by a financial institu
funds. When you request a
out of your account and into
representative (usually a tel
check will include the name
Investopedia)
5) Manager's Checks
Manager checks are issued
that can be cashed without
process and is guaranteed b
6) Treasurer's Checks A treasurer's draft may also
Investopedia)
7) Bank drafts A bank draft is a payment th
by the issuing bank. The fun
and are then placed in the b
the payee. (Source: Investo
8) Treasury Warrants An authorization that a paym
the form of a check. Govern
warrants. (Source: accounti
1) Demand deposit A bank deposit generally no
Commercial deposit against bank.
Current account
Checking account
2) Savings Deposit A bank deposit generally int
wihtin the bank by withdraw
(ATM).
Money set side for payment
2) Change Fund Money set aside and advanc
giving change for business t
merchandising or service op
3) Interest Fund
Money set aside for the purp
4) Dividend Fund Money set aside for the purp
stock issued to shareholders
5) Tax Fund Money set aside for the purp
authority like the BIR.
6) Payroll Fund Money set aside for the purp
employees of an entity.
7) Revolving Fund Money set aside for the purp
purpose set by managemen
employees.
 8) Purchasing Fund
. Noncurrent Asset 1) Sinking Fund
Cash Fund for
noncurrent operations 2) Depreciation Fund
PPE Acquisition Fund
PPE Replacement Fund
3) Pension Fund
4) Preferred Redemption Fund
5) Contingent Fund
Other cash not 1) Cash in closed bank
available for
immediate use in
current operations
Money set aside for the purp
Money set aside for paymen
parallel to the classification
Money set aside for the acq
remains as noncurrent asset
A pension fund, also known
is any plan, fund, or scheme
are pooled monetary contrib
unions, or other organizatio
retirement benefits. (Source
A fund set aside to ensure t
(Source: academia.edu)
A fund set aside to cope wit
business may encounter at a
Bank deposits maintained in
estimated realizable value. T
provides a maximum deposi
per bank. It covers all types
pdic.gov.ph)
 BRIEF DESCRIPTION

Traveler's checks are a form of payment in the form of checks issued by

financial institutions and generally used by people when traveling to foreign
countries. These checks are purchased for set amounts and can be used to
buy goods or services or be exchanged for cash. (Reference: Investopedia)

A postal order or postal note is a type of money order usually intended for
sending money through the mail. It is purchased at a post office and is
payable at another post office to the named recipient. A fee for the service,
known as poundage, is paid by the purchaser. (Source: Wikipedia)
A cashier’s check is a secure way to make large payments. The check itself is
written by a financial institution such as a bank or credit union against its own
funds. When you request a cashier's check from your bank, money is moved
out of your account and into the bank's account, and then a bank
representative (usually a teller) signs it over to a named third party. (The
check will include the names of both the recipient and remitter.) (Source:
Investopedia)

Manager checks are issued by the bank in its name, upon itself. It is a check
that can be cashed without being passed through the regular banking clearing
process and is guaranteed by the bank issuing it. (Source: harbourfronts.com)
A treasurer's draft may also be referred to as a cashier's check. (Source:
Investopedia)
A bank draft is a payment that is like a check, but its amount is guaranteed
by the issuing bank. The funds are drawn from the requesting payer's account
and are then placed in the bank's reserve account until the draft is cashed by
the payee. (Source: Investopedia)
An authorization that a payment be made from a public treasury, usually in
the form of a check. Government disbursements are paid with treasury
warrants. (Source: accountingtools.com)
A bank deposit generally non-interest bearing and withdrawalble by checks
against bank.

A bank deposit generally interest bearing, with passbook, and withdrawable

wihtin the bank by withdrawal slip or through Automated Teller Machine
(ATM).
Money set side for payment of petty expenses.
Money set aside and advanced to a auhtorized individual for the purpose of
giving change for business transactions made normally those engaged in
merchandising or service operations.

Money set aside for the purpose of making interest payments on borrowings.
Money set aside for the purpose of making dividend payments on shares of
stock issued to shareholders.
Money set aside for the purpose of making various tax payments to taxing
authority like the BIR.
Money set aside for the purpose of making payroll payments of officers and
employees of an entity.
Money set aside for the purpose of making payments of limited or specific
purpose set by management like for purchase of inexpesive items and loan to
employees.
Money set aside for the purpose of purchasing inventories.
Money set aside for payment of noncurrent liabilities. Its classification is
parallel to the classification of the related liability.

Money set aside for the acquisition of property, plant and equipment. It
remains as noncurrent asset even it will be disbursed within one year or less.

A pension fund, also known as a superannuation fund in some countries,

is any plan, fund, or scheme that provides retirement income. Pension funds
are pooled monetary contributions from pension plans set up by employers,
unions, or other organizations to provide for their employees' or members'
retirement benefits. (Source: cfainstitute.org)
A fund set aside to ensure the eventual redemption of preferred stock.
(Source: academia.edu)
A fund set aside to cope with any unforeseen events or emergencies that a
business may encounter at any point in time.
Bank deposits maintained in banks under bankruptcy. This is measured at
estimated realizable value. The Philippine Deposit Insurance Corporation
provides a maximum deposit insurance coverage of PhP500,000 per depositor
per bank. It covers all types of bank deposits in banks. (Reference:
pdic.gov.ph)
No. Items
. Cash in foreign currency
. Deposit in foreign bank
. Cash in closed bank
. Compensating balance
. Bank overdraft
. Cash Advances
. A type of savings account offered by banks
Certificate of Deposit (CD) in which the depositor generally agrees not
. Unused credit line
. Excess cash temporary
investment in shares of
stocks
Description Measurement at Reporting Date S
Translated to Philippine Peso using the 1)
closing rate at reporting date. 2)
Translated to Philippine Peso using the 1)
closing rate at reporting date. 2)
At estimated realizable value
A minimum bank deposit balance that 1)
must be maintained in connection with
bank borrowing agreement.
2)
3)
1)
This represents a negative balance in the
cash in bank account, normally in checking
account due to more disbursements in the
form of checks than its deposit balance.
2)
1)
2)
3)
1)
to take withdrawal for a specified length of 2)
time.
3)
A line of credit is a credit facility extended
by a bank or other financial institution to a
government, business or individual
customer that enables the customer to
draw on the facility when the customer
needs funds. (Wikipedia)
Unused credit line = Credit line - Approved
borrowing amount
1)
2)
. Excess cash temporary 1)
investment in debt
securities
2)
 Situation Classification Accounting Treatment
Unrestricted Current asset Included as cash
Restricted Noncurrent asset Appropriate account
Unrestricted Current asset Included as cash
Restricted Noncurrent asset Appropriate account
Noncurrent asset Receivable from Closed Bank
Cash in Closed Bank
Not legally restricted whether the Current asset Part of cash
borrowing term is short-term or long-
term. (if the problem is silent)
Legally restricted for a short-term Current asset Cash Held as Compensating Balance
borrowing.
Legally restricted for a long-term Noncurrent asset Cash Held as Compensating Balance
borrowing.
Two bank accounts within the same
bank.
a) One is overdraft, the other is not May be netted against bank account with
and unrestricted positive balance if it is part of cash
management. (PAS 7.8)
b) One is overdraft, the other is not Current liability
but restricted Reported as Bank overdraft and cannot
be offset against restricted bank account.
Two bank accounts within the same
bank.
a) One is overdraft with material Current liability Reported as Bank overdraft and cannot
amount (Bank 1), the other is not be offset.
and unrestricted (Bank 2)
b) May be netted for financial reporting
One is overdraft with immaterial purposes.
amount (Bank 1), the other is not
and unrestricted (Bank 2)
Travel advances Current Asset Receivable:
a) Advances to Salesman
Postage stamps on hand Current Asset Prepaid Expense:
a) Supplies
Employee advances or IOUs Current Asset Receivable:
a) Advances to Employees
Current Asset Cash Equivalents
Invested three months before maturity
Invested for more than three months Current asset Short-term investments
up to one year.
Invested for more than one year. Noncurrent asset Long-term investments
Only disclosure in the notes to the
financial statements.

If held for trading or acquired it for
the purpose of selling it in the near
term.
The entity's objective is both to have
contractual cash flows (dividend
income) and selling the financial
assets when the need for cash arises.
Current asset Financial Asset at Fair Value Through
Profit or Loss (FA - FVTPL)
Current asset Financial Asset at Fair Value Through
Other Comprehensive Income
(FA - FVTOCI)
The entity's objective is both to have
contractual cash flows (dividend
income) and selling the financial
assets when the need for cash arises.
If held for trading or acquired it for Current asset Financial Asset at Fair Value Through
the purpose of selling it in the near Profit or Loss (FA - FVTPL)
term.
Current asset Financial Asset at Fair Value Through
The entity's objective is both to have Other Comprehensive Income
contractual cash flows (interest (FA - FVTOCI)
income) and selling the financial
assets when the need for cash arises.