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Megan C
Megan C , Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16539
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Proof of cash. Im preparing my first proof of cash worksheet.

Resolved Question:

Proof of cash. I'm preparing my first proof of cash worksheet. I need verification that I am setting it up right, pulling the information from the correct reports, etc. Company's cash balance for books has been way off from the bank for years. I'm trying to reconcile starting with the 2013 year. I have a spreadsheet that I can share with you to see what I have done so far. Thank you.
Submitted: 2 years ago.
Category: Finance
Expert:  Megan C replied 2 years ago.

Megan C :

Thanks, XXXXX XXXXX requesting me.

Megan C :

You can send the file using the paperclip icon. Please remove all identifying information as this is posted on the web

Customer:

Thank you. Just one second while I remove identifying info.


 

Megan C :

Okay thanks

Megan C :

Thanks

Megan C :

It looks good. Looks like you have a mess on your hands, though lol

Megan C :

Do you need anything else today, Terry?

Customer:

Well, I lost connection with the chat for a few minutes there. Were you able to view the file I sent?

Megan C :

Yes I was

Megan C :

And I said that it looked good...but looked like you had a mess on your hands!

Customer:

I don't see that in the chat window. I have a few questions to clarify what I am doing, if you don't mind.

Megan C :

That's no problem at all

Customer:

Balance per Books: January receipts - I took that from the total of debits in the G/L cash account for January, but I'm thinking it should have come from the cash receipts report?

Megan C :

There should be a cash receipts report...but if they aren't keeping their books up, then it may not be accurate

Customer:

It may not be accurate, but that should be where I pull that number from, not the total of the debits in the G/L account, correct?

Megan C :

That's right, because there may be other debits in there like interest revenue etc

Customer:

The corrected balance per books for Jan. receipts agrees with the cash receipts report, after I subtract the errors and adjustments. But that was starting with the total debits like I said. So if I start with the cash receipts report then I would not show those adjustments in column 2, correct/

Megan C :

That is correct

Customer:

Apply the same scenario to the Jan disbursements. On the worksheet you have, I started with the total of all credits in the G/L cash account. I'm thinking that was not correct. I should take the starting number from the cash disbursements report or something similar?

Megan C :

That would be correct...

Megan C :

Because credits could include NSF checks, bank fees, etc

Customer:

Thank you. Now about the errors and adjustments in the cash account that are not actually cash receipts nor disbursements, where do I put them on the proof of cash?

Megan C :

You can make a separate column for that

Megan C :

or rows

Customer:

Thank you, XXXXX XXXXX make those corrections and try again. My head is hurting, but I am determined to get this thing straightened out.

Megan C :

LOL I know the feeling.

Customer:

Would it be okay to contact you for follow up

Megan C :

I'm working on a few of my own

Megan C :

:-)

Megan C :

Yes, you can just ask for me again if you need to follow up

Megan C and other Finance Specialists are ready to help you
Expert:  Megan C replied 2 years ago.
Thanks, XXXXX XXXXX your positive rating. Please come back and visit me any time you have a question that needs answered. It was a pleasure working with you today.
Customer: replied 2 years ago.

Megan, I have adjusted my initial worksheet to reflect "Book" receipts compiled from the cash summary report (A/R module) and any JE's. The "Book" disbursements comes from the check register and JE's (mainly payroll ACH). From plugging in these updated numbers, it appears that for the month of January, at least, cash receipts and cash disbursements were properly recorded. I do have some small adjustments to make of erroneous entries to cash. The difference between bank and book corrected balance remains the same. What should I do with this difference? I was thinking about making a journal entry to debit cash $51,505.21 and credit misc expense to the Jan. time period, but that would make any old reports between then and now meaningless. I am attaching a new worksheet.

Attachment: 2013-10-25_200957_proof_of_cash_working.xls

Expert:  Megan C replied 2 years ago.
Thanks,

All looks great! Thanks for sharing. You're going to have to make the adjustment. The easiest thing to do is just write it off to MISC expense. I know it makes old reports useless, but it is what it is...you have to clean it up.

Please let me know if you need anything else.

Thanks

Megan
Megan C and other Finance Specialists are ready to help you
Customer: replied 2 years ago.

Thank you for your help. I very much appreciate your expertise and having someone to go to when I am stumped. Smile

Expert:  Megan C replied 2 years ago.
I'm glad I could be of assistance. Just let me know if you need anything additional

Thanks!

Megan