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Cash & Non-Cash Items

December 4, 2009 josephmestrada 7 comments

CASH and Non-Cash Items

(dagdag po ito sa mga nabanggit na)

* Para madali nyo matutunan ito, kung makaka-encounter ka ng hindi mo talaga alam na
item, itanong mo lang sa sarili mo: “readily available ba ito pag kinailangan kong
gastusin?” Yun ang lagi mong itatanong sa sarili mo para maconsider mo sya as cash.

CASH ITEMS:

Cash – salapi. Cold cold cash…

Change Fund – barya-baryang panukli

Petty Cash Fund – gamit sa maliliit na gastusin. Kaya nga “petty”.

Current Account – bank account used by the company for collections/disbursements.

Parang savings account
Payroll Account – used by the company to pay employee’s compensation (nakakahilo
magreconcile nito pag malaking kumpanya ang hawak mo, hahaha)

Traveler’s Check – checked released by the bank that can be used at any country. Minsan,
ang mga “travelers” o manlalakbay, diba hindi naman agad sila nagkakaroon ng local
currency ng bansang pinupuntahan nila unless pumunta agad sila sa bank at magpapalit. Eh
papano kung nagutom sila? Di naman nila pwedeng ipambayad ang US Dollars sa China.
So, para may panggastos sila for the mean time na wala pa silang cash, maari nilang
gamitin yung traveler’s check as a legal tender. Kaya pang-“traveler” talaga sya.
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hand corner ng check. Cash naman ito. Iyon nga lang, hindi sya pedeng ipapalit sa cash,
pede lang sya ideposito sa bank. Eh papanong naconsider na cash to kung hindi pede
ipapalit agad na cash? Eh pede mo namang ideposito ito tapos iwithdraw mo diba? Kaya Close and accept
cash to.

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Replenishment Check – syempre cash to.

Treasury bills:
Current – if maturity from DATE of PURCHASE is within 3 months (cash equivalents)

TIME DEPOSIT/Money Market Instruments

Current – If 3 months or less (cash equivalent)

Cashier’s Check – considered as cash ito kasi guaranteed ito ng bank, and due and
demandable.

Manager’s Check – pareho lang to ng Casheir’s Check.

*eh what makes the cashier’s check and manager’s check so special compared to a regular
check? Well, ang CC or MC ay “guaranteed” ng bank. Unlike ng regular check, ang
regular check (customer’s check) ay maaring tumalbog.

Unrealeased Checks – ito yung mga dapat ipangbabayad sa mga creditor pero hindi pa
na-rerelease so hawak mo pa yung cheke. Kung hawak mo pa yung cheke, e di cash mo pa
yun. Sa Law, may mga rules and regulations regarding payment/endorsement of check. Isa
sa mga proof na bayad na ang debtor ay pag nasa creditor na ang check.

Deposits in Foreign Banks – dapat unrestricted sya para considered as cash. It should be
measured at its spot rate or the exchange rate at the balance sheet date.

Cash Appropriated for short term purposes – kahit na appropriated na sya, pero kung
ang purpose ay for short term lang naman, classified as cash parin sya. Tandaan nyo lang
sa appropriation ang “like father like son” principle. Kung para saan ang purpose ng
appropriation (whether short or long term) ay siya rin ang appropriation.

Compensating Balance – ito yung minimum amount na dapat mo ideposito sa bank. Pag
bumaba ka sa compensating balance, magkakaroon ka ng bank charges (parang yung
nangyari sa pera ko dati nung bata ako kaya naubos heheh) as long as NOT
RESTRICTED, cash parin sya.

NON CASH items

Postage stamps – hindi ito pedeng ipambayad kay aling nena pambili ng kendi. Hindi sya
cash. Prepaid expense.

Treasury bills:
Non- Current – if maturity from DATE of PURCHASE is more than 3 months
(temporary investment)

TIME DEPOSIT/Money Market Instruments

Non-current – if more than 3 months (temporary investments)

Post-dated check – since “post”-dated sya, ibig sabihin, dated sya on a future date. Ang
cheke, non-negotiable o hindi mo pedeng ipapalit sa banko when the date written on the
face of the check ay hindi pa ngayon (or future dated). Ibalik sa Accounts Payable(payor)
or Accounts Receivable(payee)
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NSF Check – tumalbog na cheke.
Close and accept
Restricted Deposits in Foreign Banks – tunog palang, hindi na cash. Restricted kasi sya,
hindi readily available.
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Cash Appropriated for LONG term purposes – ulit, “like father, like son”. Kung para
saan ang purpose, sya rin ang classification.

Sinking fund (or sometimes Bond Sinking Fund) – is comprised of cash and investment
securities that have been accumulated for the stated purpose of repaying a specific loan
(Intermediate Accounting, Stice , Stice & Skousen). So, in short, appropriated sya for long
term purposes.

Stock Certificates – baka may makulit na prof na magsali nito eh. Hindi to cash at HINDI
rin ito negotiable instrument. Ito lang ay ang proof na may hawak kang stocks. Kasi ang
“stocks” hindi yan barya barya o ginto ginto na ipinamimigay pag bumili ka sa isang
korporasyon. Ang stocks ay intangible (o, hindi intangible asset ah ginamit ko lang yung
word na “intangible” as a description, wag malito) kasi hindi ito nakikita o nahahawakan.
So para may proof ka na may hawak ka ng stocks, binibigyan ka ng issuing corporation ng
Stock Certificate at dun naka-state kung ilang stocks ang hawak mo at kung magkakano.

Stale Check – ito yung checks na hindi napapalitan ng payee (o binayaran) for a long time
(usually ang silent rule ay 6 months, unless otherwise specified). Hindi ito cash kasi
usually ang gagawin ng kumpanyang nag-issue nito ay mag-iissue ng “stop payment
order” sa bank. So, babalik sa cash yan ng issuing company. Hindi na ito cash on the part
of the payee. Magiging receivable ulit yung amount na yun kasi nga na-stale, “napanis”
yung cheke.

As far as I can remember, ito yung mga weird terms sa cash na

maaring makapagpalito sa mga estudyante.

Follow-up Problem

Author: luvrgurl

Grain comp. ledger showed a balnce of P2,205,600 in its “cash” account on

dec. 31,2009 . included in this balance are the ff. items:
DAIF checks returned by bank P20,000
Saving account P750000
IOUs P1,200
postage stamps 600
bank draft 10,000
cash on hand 30,000
cash in sinking fund 500,000
customers’check dated jan.2010 5,400
travel advances 4,000
travel’s check 8,000

determine the total amt. that should be in cash balance at dec.31,2009

source: Intermediate Accounting Vol 1 2010 Robles Empleo

P. 69 Problem 2-3
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Sabi, “included in this cash balance”. So ibig sabihin the enumerated amounts are
incorporated dun sa P2,205,600. So, dapat alam natin kung ano ang cash at kung ano ang Close and accept
hindi. Isa isahin natin:

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DAIF CHECKS: deduct the 20,000 from the balance. Bakit? Kasi tumalbog yung check ng
customer, therefore balik sya sa receivables dahil wala naman tayo nakolekta.

Savings Account: do nothing. It’s cash and it’s already included in the cash balance.

IOU’s: deduct the P1,200. Bakit? kasi pautang natin to sa mga tao kaya nga “I owe you”,
meaning to say, somebody owes us money, therefore must be classified as AR and not
Cash.

Postage Stamp: deduct the 600. Bakit? Dahil, uulitin ko, hindi ka makakabili ng kendi sa
tindahan ni aling Nena na bayad mo ay Stamp, baka batuhin ka pa ng bote ng suka,
hahaha. Prepaid Expense ang Stamps, hindi cash.

Bank Draft: do nothing. Ano ba ang bank draft? Cash equivalent yan. Para yang cashier’s
check. Pay to cash. Kunyari, bibili ka ng worth $2,000,000 na inventory. Magdadala ka ba
ng cash worth 2M? or credit card? Syempre hindi. You may pay either through a check or a
bank draft. So good as cash to.

Cash on hand: obvious, do nothing.

Cash in Sinking Fund: deduct the 500,000. Bakit? Though it’s cash, but it’s restricted for
long term purposes. Following the principle of “Res Perit Domino”, meaning “thing
follows it’s master”, it’s also considered as a Long Term Asset

Customers’ Check dated Jan. 2010: Syempre, deduct the 5,400. Bakit? Kasi post dated ang
check. Hindi pa sya readily convertible into cash. Therefore, still considered as an AR.

Travel Advances: deduct the 4.000. Syempre, hindi naman to cash kasi nga “advances”
meaning binigay mo yung pera for travel purposes at ibabalik sayo, thus, it’s an AR.

Traveler’s Check (not travel’s check): syempre included as cash to. Usually eto yung cheke
na ginagamit ng mga nangingibang bansa para maiwasan ang hassle ng pagpapapalit ng
foreign currency.

Therefore:

2,205,600 unadjusted ending cash balance

(20,000) DAIF

(1,200) IOU

(600) Postages

(500,000) Sinking Fund

(5,400) Postdated Checks

(4,000) Travel Advances

__________
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1,674,400 is the correct Cash Balance
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