Cash and Cash Equivalent

Cash

Includes money and other negotiable instrument that is payable in money and acceptable by the bank for deposit and immediate credit.

Composition of cash on hand

• Customer check

• Undeposited Cash Collection

• Travelers Check

• Cashier Check

• Official check

• Treasurer check

• Manager check

• Postal money order

• Bank Drafts

Composition of cash in bank

• Current account

• Checking account

• Demand depostit

• Commercial account

• Saving deposit

Composition of Cash fund for current operation

• Change fund

• Payroll fund

• Purchasing fund

• Revolving fund

• Interest fund

• Petty Cash fund

• Dividend fund

• Travel fund

• Tax fund

Cash equivalent

are short-term highly liquid investments that are readily convertible into cash and so near their maturity that they present insignificant risk of changes in value due to changes in interest rates. Only highly liquid investments that are acquired three months, or less than three months.

Composition of Cash Equivalent

• Three-month commercial paper or money market instrument

• Three-month time deposit

• Three-month treasury bill

Measurement of Cash

Face Amount

Valuation of Cash in the Statement of Financial Position

• Generally valued at face amount

• Cash in foreign currency is valued in Philippine peso using the current exchange rate as of the reporting date

Cash in Closed Banks or in Banks having Financial Difficulty

should be shown at its estimated realizable or recoverable value and is presented as Receivables.