Important points related to cash accounting
1⃣ The following items are not considered as cash:
A) Cash equivalent items (considered as short-term investment)
b) Drug promise checks, temporary payment receipts (such as employee benefit receipts), which are considered as accounts receivable.
c) Balance of postage stamps (classified as advance payment)
d) Deposits whose use is limited for certain purposes, such as open deposits for the purchase of employee services and open deposits for the purchase of bonds.
e) Restricted cash funds such as frozen bank cash funds ordered by judicial authorities
f) Compensatory balances that are deposited when receiving facilities from the bank, until full payment of installments.
2. The compensatory balances deposited to get a short-term loan, considering that the maturity of the short-term loan is less than one year, it should be classified as cash.
3⃣ When business units use current accounts for their receiving and payment operations, banks usually prepare a report containing all operations related to the current account and send it to the business unit on a monthly basis or whenever the business unit requests. This term is referred to as bank statement. After receiving the bank statement, the items listed in the debit column of the bank account in the business unit’s offices with the items listed in the credit column of the bank statement and the items listed in the credit column of the bank account in the business unit’s offices. It is matched with the items listed in the debit column of the bank statement. Items that are registered both in the bank statement and in the business unit’s offices are marked with a tick mark and a line is drawn around the disputed items. These items are called open items.
4⃣ Interim funds are the funds that have been deposited into the current account of the business unit in the last days of the month and have been recorded in the books, but the bank will register them at the beginning of the next month. Such as the funds deposited into the current account of the business unit by one of the debtors at the end month through one of the other branches of the bank, which was registered in the business unit’s offices on the same day, but the bank may accept this deposit with a delay of several days. When preparing a bank reconciliation statement, interim funds are added to the bank account statement.
5⃣ After preparing the bank discrepancy statement, it is necessary to make some corrections in the books of the business unit so that the balance of the bank account according to the books matches the correct balance of the bank. For this purpose, the correction documents that are registered on the bank discrepancy statement include only the items that are reported in the reconciliation section of the balance according to the books with the correct balance, i.e. bank collections, bank withdrawals and discrepancies that are due to the mistakes of the business unit. have come into existence However, the items that are reported in the reconciliation section of the bank statement balance with the correct balance do not need to issue correction documents, because such items are automatically resolved due to the passage of time or going to the bank to correct the mistakes.
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This post is written by seyedsajjadam