A reconciliation that includes proof of receipts and disbursements that is useful
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Century 21 Accounting: General Journal11th EditionClaudia Bienias Gilbertson, Debra Gentene, Mark W Lehman 1,012 solutions Intermediate Accounting14th EditionDonald E. Kieso, Jerry J. Weygandt, Terry D. Warfield 1,471 solutions What is a Proof of Cash?A proof of cash is essentially a roll forward of each line item in a bank reconciliation from one accounting period to the next, incorporating separate columns for cash receipts and cash disbursements. The columns (and formula) used for a proof of cash are: Beginning balance + Cash receipts in the period - Cash disbursements in the period = Ending balance Understanding a Proof of CashWhen used for each line item in a bank reconciliation, the proof of cash highlights areas in which there are discrepancies, and which may therefore require further investigation, and perhaps some adjusting entries. A proof of cash can indicate an array of other reconciliation issues that will require adjustments to a company's accounting records, including the following:
A proof of cash can also uncover instances of fraud. If there is a difference between the totals, it can indicate the presence of unauthorized borrowings and repayments within the time period covered by a single bank statement. Thus, if a controller were to illegally withdraw $10,000 from the company accounts near the beginning of the month for his personal use and replaced the funds before the end of the month, the issue would not appear in a normal bank reconciliation as a reconciling item. However, a proof of cash would be more likely to flag the extra cash withdrawal and cash return within the period. A proof of cash is more complicated to complete than a bank reconciliation. However, it provides a greater degree of detail, and so makes it easier to locate errors than a bank reconciliation. Thus, it may be cost-effective to use a proof of cash when you expect to find a large number of different cash-related errors within an accounting period. Is an expanded reconciliation in that it includes proof of receipts and disbursement?Proof of Cash A proof of cash is an expanded reconciliation in that it includes proof of receipts and disbursements. = This approach may be useful in discovering possible discrepancies in handling cash particularly when cash receipts have been recorded but have not been deposited.
What is disbursement reconciliation?Disbursement Reconciliation lets you see where you stand.
View your disbursements and their status, sorted in a variety of ways. Clearly identify which checks are paid and which are outstanding. The simplified Disbursement Reconciliation process streamlines account management.
What are 4 types of bank reconciliation?Types of Account Reconciliation. Account reconciliations come in various forms and can be for personal or professional use. There are five primary types of account reconciliation: bank reconciliation, vendor reconciliation, business-specific reconciliation, intercompany reconciliation, and customer reconciliation.
What is used in the reconciliation of cash receipts?Using the cash register tape, summarize on the form the amount of receipts by cash, check, coupon, and credit card. Compare the totals on the form for cash, checks, coupons, and credit card receipts that are based on individual receipts and that are based on the cash register.
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