IA Cash and Cash Equivalents

Cash

Cash

includes money or equivalent or other instrument use to settle obligations that is readily available for unrestricted use.

Money

standard medium of exchange and basis of accounting measurements.

Cash on Hand

undeposited collection and other current funds held as of the reporting date.

Cash in Bank

deposits in bank that are ready for immediate withdrawals and unrestricted use.

Bank Drafts

guarantees by bank to advance funds on the demand by the party to whom the draft was directed.

Money Orders

similar to bank drafts but drawn from post office or other financial institutions.

Revolving Fund

fund set by management which they use it for specific purpose or limited use.

Postdated Checks

checks dated at the future date.

Unused Credit line

difference between line of credit and the amount that was actually borrowed.

Postdated Check Received

revert back using accounts receivable.

Postdated/Undelivered Check Drawn

revert back using accounts payable.

Stale checks

when checks delivered to payee but not encashed within a relatively long period of time, normally 6 months or more.

Cash Equivalent

short term highly liquid investment that are readily convertible to know amount of cash and which are subject to insignificant amount of risk of changes in value.

Treasury Bill

Short term obligation issued by the government with the maturity of 90 days.

treasury note

Long term obligation issued by the government with the maturity of 1 year to less than 10 years.

treasury bond

Long term obligation issued by the government with the maturity of 10 years or more.

Money market instruments

short term securities investment in portfolio.

Time Deposits

form of bank deposits normally made in fixed denominations

Face Value

measurements of cash

Realizable Value

amount expected to be recovered from the deposit and is determined usually to reference to the ensured amount of the deposit.

Compensating Balance

minimum amount that must be maintained in an entity’s bank account as support for funds borrowed from the bank.

Bank Overdraft

is a credit balance in the bank in the cash in bank resulting from overpayment of check in excess of amount deposit.

Segregation of incompatible duties

the duties of authorization, execution, recording, custody shoud be segregated

Imprest System

requires that all cash receipts should be deposited intact and all cash disbursement should be made through check.

Bank Reconciliation

should be prepared regularly, immediately upon receipt of monthly bank statement .

Cash Counts

Actual cash tallies with the balance per records.

Voucher System

an internal control over all cash disbursement.

Voucher

a written authorization or business document that supports every disbursement made by the entity.

Shortage

Cash count result to the amount less than the balance per record.

Overage

Cash count result to the amount more than the balance per record.

Suspense Account

Cash shortage or overage account.

Receivables

account where shortage is closed when it was due to the fault of the employee.

Payable

account where overage is closed when it was due to the fault of the employee.

Gain

when overage reported as no merit.

Loss

when shortage reported as no merit.

Lapping

occurs when collection of receivable from customer is misappropriated and then concealed by applying a subsequent collection from another customer.

Kiting

occurs when cash shortage is concealed by overstating the balance of cash

Overstated

the balance where the receipt is reported in the current period while the disbursement is recorded at the next period.

Understated

the balance where the receipt is reported in the next period while the disbursement is recorded at the current period.

Window dressing

Occurs when books are not closed at the year end and transactions in the subsequent period are deliberately recorded in the current period in order to improve financial performance

Petty Cash Fund

money set aside to defray relatively small amounts of cash disbursement