PROOF OF CASH

Two-Date Bank Reconciliation

BENEFITS OF PROOF OF CASH

Saves time in locating where errors might have

occurred
Verifies all bank activity recorded on books
Proves receipts & expenditures per bank tie to
receipts & expenditures per books
One down fall cannot guarantee all memo activity
is recorded on books
 DEBIT CREDIT
Refers to cash receipts Refers to cash
BOOK or all items debited to disbursements or all
the cash in bank account items credited to the
cash in bank account

Refers to all items Refers to all items

BANK debited to the account of
the depositor which
credited to the account
of the depositor which
include checks paid by include deposits
bank and debit memos acknowledged by bank
and credit memos
COMPUTATION OF BOOK BALANCE

Balance per book, Beginning of the month XXX

Add: Book Debits during the month XXX
Total XXX
Less: Book Credits during the month XXX
Balance per book, end of the month XXX
COMPUTATION OF BANK BALANCE

Balance per Bank, beginning of the month XXX

Add: Bank Credits during the month XXX
Total XXX
Less: Bank Debits during the month XXX
Balance per Bank, end of month XXX
COMPUTATION OF DEPOSITS IN
TRANSIT
Deposit in Transit, beginning of the month XXX
ADD: Cash receipts deposited during the month
Book Debits XXX
Credit Memo, previous month (XXX) XXX
Total deposits to be acknowledged by bank XXX
LESS: Deposits Acknowledged by bank during the month
Bank Credits XXX
Credit memo, current month (XXX) XXX
Deposits in Transit, end of month XXX
COMPUTATION OF OUTSTANDING
CHECKS
Outstanding Checks, Beginning of month XXX
ADD: Checks drawn by depositor during the month
Book Credits XXX
Debit Memo, previous month (XXX) XXX
Total Checks to be paid by bank XXX
Less: Checks paid by bank during the month
Bank Debits XXX
Debit Memo, Current month (XXX) XXX
Outstanding Checks, End of Month XXX
PROOF OF CASH

An expanded reconciliation in that it

includes proof of receipts and
disbursements.
FORMS OF PROOF OF CASH
 ADJUSTED BALANCE METHOD
Previous Receipts Disbursements Current Month
month
Balance per book
Credit Memo:
Previous month
Current Month
Debit memos
Previous month
Current Month
Errors:
Adjusted book balance
 Previous Receipts Disbursements Current Month
month
Balance per bank
Deposits in Transit:
Previous month
Current Month
Outstanding Checks:
Previous month
Current Month
Errors:
Adjusted bank balance
Book to Bank
 Previous Receipts Disbursements Current Month
month
Balance per book XXX XXX
Credit Memo:
Previous month XXX (XXX)
Current Month XXX XXX
Debit memos
Previous month (XXX) (XXX)
Current Month XXX (XXX)
Deposit in Transit:
Previous month (XXX) XXX
Current month (XXX) (XXX)
Outstanding Checks
Previous month XXX XXX
Current month (XXX) XXX
Errors: XXX/(XXX)
Balance per bank XXX XXX XXX XXX
BANK TO BOOK
 Previous Receipts Disbursements Current Month
month
Balance per bank XXX XXX
Credit Memo:
Previous month (XXX) XXX
Current Month (XXX) (XXX)
Debit memos
Previous month XXX XXX
Current Month (XXX) XXX
Deposit in Transit:
Previous month XXX (XXX)
Current month XXX XXX
Outstanding Checks
Previous month (XXX) (XXX)
Current month XXX (XXX)
Errors: XXX/(XXX) XXX/(XXX)
Balance per bank XXX XXX XXX XXX
EXAMPLE #1
Cash in Bank per Ledger
Balance, January 31 P50,000
Book Debits for February, including January CM for note
Collected of P15,000 200,000
Book Credits for February, including NSF check of P5,000
And service charge of P1,000 for January 180,000
Bank Statement for February
Balance, January 31 84,000
Bank credits for February, including CM for note collected of
P20,000 and January deposit in transit of P40,000 170,000
Bank Deposits for February, including NSF check of P10,00
And January outstanding check of P65,000 130,000
EXAMPLE #2
January 31 February 28
Balance per book 50,000 70,000
Balance per bank 84,000 124,000
Book debits 200,000
Book credits 180,000
Bank debits 130,000
Book credits 170,000
Deposits in Transit 40,000 75,000
Outstanding Checks 65,000 119,000
NSF Checks 5,000 10,000
Service Charge 1,000
Note collected by bank 15,000 20,000