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    Lecture No.3 Proof of Cash

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    delrosario.kenneth996
    This document discusses the "two-date bank reconciliation" method for proving cash, which reconciles cash balances at the beginning and end of the month by comparing book and bank records of receipts and disbursements. It provides an illustration that computes the book balance, bank balance, deposits in transit, and outstanding checks for January 31 and February 28. The three methods for proof of cash are also listed as the adjusted balance method, book to bank method, and bank to book method.

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    Lecture No.3 Proof of Cash

    Uploaded by

    delrosario.kenneth996
    14 views2 pages
    This document discusses the "two-date bank reconciliation" method for proving cash, which reconciles cash balances at the beginning and end of the month by comparing book and bank records of receipts and disbursements. It provides an illustration that computes the book balance, bank balance, deposits in transit, and outstanding checks for January 31 and February 28. The three methods for proof of cash are also listed as the adjusted balance method, book to bank method, and bank to book method.

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    proofofcash

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    Lecture-no.3-Proof-of-cash (2)

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    This document discusses the "two-date bank reconciliation" method for proving cash, which reconciles cash balances at the beginning and end of the month by comparing book and bank records of receipts and disbursements. It provides an illustration that computes the book balance, bank balance, deposits in transit, and outstanding checks for January 31 and February 28. The three methods for proof of cash are also listed as the adjusted balance method, book to bank method, and bank to book method.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    14 views2 pages

    Lecture No.3 Proof of Cash

    Uploaded by

    delrosario.kenneth996
    This document discusses the "two-date bank reconciliation" method for proving cash, which reconciles cash balances at the beginning and end of the month by comparing book and bank records of receipts and disbursements. It provides an illustration that computes the book balance, bank balance, deposits in transit, and outstanding checks for January 31 and February 28. The three methods for proof of cash are also listed as the adjusted balance method, book to bank method, and bank to book method.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    INTERMEDIATE ACCT 1 –Lecture no.

    3 – PROOF OF CASH

    Proof of cash – “Two-date bank reconciliation”. It is an expanded reconciliation in that it includes proof of receipts
    and disbursements.

    Computation of book balance


    Balance per book-beginning of month xx
    Add: Book Debits during the month xx
    Total xx
    Less: Book Credits during the month xx
    Balance per book-end of month xx

    Computation of bank balance


    Balance per bank-beginning of month xx
    Add: Bank Credits during the month xx
    Total xx
    Less: Bank debits during the month xx
    Balance per bank-end of month xx

    Computation of deposits in transit


    Deposits in transit-beginning of month xx
    Add: Cash receipts deposited during the month xx
    Total deposits to be acknowledged by bank xx
    Less: Deposits acknowledged by bank during the mo. xx
    Deposit in transit –end of the month xx

    Computation of outstanding checks


    Outstanding checks-beginning of month xx
    Add: Checks drawn by depositor during the month xx
    Total checks to be paid by bank xx
    Less: Checks paid by bank during the month xx
    Outstanding checks-end of month xx

    Three forms of proof of cash:


    1. Adjusted balance method
    2. Book to bank method
    3. Bank to book method

    Illustration:
    Cash in bank per ledger
    Balance, Jan 31 50,000
    Book debits-Feb., including Jan CM for note collected of P15,000 200,000
    Book credits-Feb., including NSF check of P5,000 and service charge of P1,000-Jan 180,000

    Bank statement for February


    Balance, Jan 31 84,000
    Bank credits –Feb, including CM for note collected-P20,000 and Jan.
    deposit in transit of P40,000 170,000
    Bank debits for Feb, including NSF check of P10,000 and Jan. outstanding
    check of 65,000 130,000

    Illustration (summary) 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
    Deposit in transit 40,000 75,000
    Outstanding checks 65,000 119,000
    NSF check 5,000 10,000
    Service charge 1,000 ----
    Note collected by bank 15,000 20,000

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