CCE

“CASH”
CASH IN HAND
Checks drawn by the
Excluded from cash
Included as Cash company (ADD BACK TO
(To record:A/R)
CASH/INCLUDED)
Currencies and coins Customer’s postdated check Company’s unreleased check
Money order Customer’s NSF/DAIF/DAUD Company’s postdated check
check
Bank drafts Customer’s stale check Company’s stale check
Cashier’s check
Certified check
Customer’s check
Manager’s check
Personal check
Traveler’s check
Cash in Bank
Checking account Included
Savings account Included
Time deposit Excluded(Cash Equivalent)
Compensating balance
Deposit in Foreign Bank
- legally UNRESTRICTED Included
- legally RESTRICTED Excluded
- NOT STATED Included
Deposit in Closed Bank Excluded
Bank Overdraft
CASH FUND
NOT FOR OPERATION
- within 12 months
Included NOT FOR OPERATION
FOR OPERATION
- beyond 12 months (always excluded from
(Included)
Excluded cash)
- Not Stated
Excluded
Petty cash fund Sinking fund Plant acquisition fund
Revolving fund Pension fund Depreciation fund
Change fund Preference shared Contingency fund
redemption fund
Payroll fund Insurance fund
Tax fund
Interest fund
Dividend fund
Travel fund
Undeposited currency and coins

Checks and money orders held unless
checks are post dated, defective or
stale.
Unrestricted bank deposits Included as cash plus adjustments
Funds on hand and deposits that are for
current use and have been restricted
for a liability that is classified as
current.
“CASH EQUIVALENTS”
Treasury Bills Bankers Acceptance

Bonds and Notes Commercial Papers
Time Deposits Investment in preference share with
redemption sate
Certificate of Deposits
*Short Term/ Date of Acquisition to Date of Maturity (WITHIN 3 MONTHS- INCLUDED)

*More than 3 months (EXCLUDED)
*Not Stated (INCLUDED)
Highly liquid investments - DATE OF PURCHASE should be THREE MONTHS OR LESS

before maturity.
Classification of investment in time-deposit, money market instruments, and

treasury bills
Term Classification
3 months or less Cash equivalents (current asset)
More than 3 months but within 1 Short term investments (other current asset)
year
More that 1 year Long-term investments (non-current asset/

excluded)
Measurement of cash
* Cash is measured at face value
* Cash in foreign currency is ,measured at current exchange rate.
* If a bank is holding the funds of an entity is in financial
difficulty/bankruptcy, cash should be written down to estimated realizable value
if the amount recoverable is estimated to be lower than the face value.
Special Items in Cash

Bank overdraft
- a credit or negative balance in the bank account of the depositor resulting
from an issuance of a check that exceeds the amount of the deposit.
Rule: Bank is classified as current liability

Exception to be rule:
- Off-set if there are 2 or more account in a bank
- Off-set if immaterial to other bank
- Materiality depends on the Bank Policy
Compensating balance
– the minimum amount of the deposit that a depositor agrees to maintain in order
to guarantee future credit availability.
- Loan of depositor or company to bank

*Legally Unrestricted - INCLUDED (part of cash)
*Legally Restricted - EXCLUDED
If the related loan is short-term - “cash held as compensating balance”
(current asset)
If the related loan is long-term - “non-current investment” (non-current
asset)
*Not Stated - INCLUDED
Undelivered or Unrelated checks to payees - part of cash
Postdated checks delivered

On part of payor - part of cash
On part of receipient - NOT part of cash
Stale checks -checks become stale if not encashed within six months from the
time of issuance.
*IOU – actually means “I Owe yoU”. May utang ako sayo in our language. Kaya if
sinabing Employees IOU, it means na your employees have payables on you.
Therefore, may receivable ka from them.
*Postage stamps – supplies yan, stamps nga eh. Sige try mong ipambayad ung mga
stamps sa tindahan.
*Savings account for future plant expansion – pag ganito yung datingan, it is
noncurrent investment.

CCE

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“CASH”

Undeposited currency and coins

Treasury Bills Bankers Acceptance

*Short Term/ Date of Acquisition to Date of Maturity (WITHIN 3 MONTHS- INCLUDED)

Highly liquid investments - DATE OF PURCHASE should be THREE MONTHS OR LESS

Classification of investment in time-deposit, money market instruments, and

More that 1 year Long-term investments (non-current asset/

Special Items in Cash

Rule: Bank is classified as current liability

- Loan of depositor or company to bank

Undelivered or Unrelated checks to payees - part of cash

Postdated checks delivered

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