CASH AND CASH EQUIVALENTS d.

Contingent fund
e. Insurance fund
Cash items include in cash: f. Fund for acquisition or construction of
property plant and equipment
1. Cash on hand
a. Customers checks
b. Cashiers or Managers Checks
c. Travelers Checks
d. Bank drafts
e. Money orders

2. Cash in bank
a. Demand deposit or Checking account
b. Saving deposit

3. Cash fund
a. Petty cash fund
b. Payroll fund
c. Dividend fund
Cash Equivalents includes:
a. Three-month BSP treasury bill
b. Three-year BSP treasury bill purchased
three months before date of maturity
c. Three-month time deposit
d. Three-month money market instrument or
commercial paper
Measurement

Cash Face Value

Cash in Foreign Current Exchange Rate
Currency
Funds of an entity is in Estimated Realizable
bankruptcy or financial Value
difficulty (if the amount
recoverable is estimated
to be lower than the face
value)

Cash fund set aside for use in current obligation:

a. Petty cash fund
b. Payroll fund
c. Travel fund
d. Interest fund
e. Dividend fund
f. Tax fund

Cash fund set aside for use in non-current purpose:

a. Sinking fund
b. Preference share
c. Redemption fund
BANK RECONCILIATION Bank to book method

Bank Balance xx
Three kinds of bank deposit: Add: Deposits in transit xx
a. Demand deposit Debit memos xx xx
b. Saving deposit Total xx
c. Time deposit Less: Outstanding checks xx
(bank reconciliation is necessary only on demand Credit memos xx xx
deposit) Book Balance xx

Bank reconciliation is usually prepared monthly

Reconciling items:
1. Book reconciling items:
a. Credit memos – increasing the bank
balance
b. Debit memos – decreasing the bank
balance
c. Errors

2. Bank reconciling items:

a. Deposits in transit – cash receipts
b. Outstanding checks – cash disbursement
c. Errors

Adjusted balance method

Book Balance xx
Add: Credit memos xx
Total xx
Less: Debit memos (xx)
Adjusted book balance xx

Bank Balance xx
Add: Deposits in transit xx
Total xx
Less: Outstanding checks (xx)
Adjusted bank balance xx

Book to bank method

Book Balance xx
Add: Credit memos xx
Outstanding checks xx xx
Total xx
Less: Debit memos xx
Deposits in transit xx xx
Bank Balance xx
PROOF OF CASH
ACCOUNTS RECEIVABLE