PROOF OF CASH

Question 1

1. What is a two-date bank reconciliation?

Answer 1

—It is “two-date” because it literally involves two dates.

—The procedures for the one-date reconciliation are the same with the two-date reconciliation.

— This become complicated when the certain facts or data are omitted, hence the necessity for computing them.

Among others, the omitted information may be any one or a combination of the following:

a. Book balance beginning and ending

b. Bank balance beginning and ending

c. Deposits in transit beginning and ending

d. Outstanding checks beginning and ending

• If the ending balance are not given, the following formulas may help
• If the beginning balance are omitted, the formulas should simply be reversed or just work back

Question 2

2. Explain book debits.

Answer 2

These refer to cash receipts or all items debited to cash in bank account

Question 3

3. Explain book credits.

Answer 3

These refer to cash disbursements or all items credited to the cash in bank account

Question 4

4. Explain bank debits.

Answer 4

These refer to all items debited to the account of the depositor which includes checks paid by the bank and debit memos In the absence of any statement to the contrary, bank debits are assumed to be checks paid by the bank

Question 5

5. Explain bank credits.

Answer 5

These refer to all items credited to the account of the depositor which include deposits acknowledge by bank and credit memos In the absence of any statement to the contrary, bank credits are assumed to be deposits acknowledged by the bank.

Question 6

6. What is the formula in the computation of balance per book?

Answer 6

Beginning of month balance per book XXX Add: Book debits during the month. XXX Less: Book credits during the month. (xxx) End of month balance per book XXX

Question 7

7. What is the formula in the computation of balance per bank?

Answer 7

Beginning of month balance per book XXX
Add: Bank credits during the month XXX
Less: Bank debits during the month. (XXX) End of month balance per book
XXX

Question 8

8. What is the formula in the computation of deposits in transit?

Question 9

9. What is the formula in the computation of outstanding checks?

Question 10

10. What is a proof of cash?