A cash book records all business transactions and is checked against bank statements for accuracy. Some companies use separate ledgers for incoming and outgoing money, and cash books can be physical or electronic. They are also used for audits to prevent fraud and ensure accuracy. A cash book is a journal or ledger in which […]
Cashing a cashier’s check is similar to endorsing a regular check, but you may need to have an account at the bank where you cash it. Verify the authenticity of the check and sign it correctly before using the funds. You’ll cash a cashier’s check like any other check you receive: by going to your […]
A pro forma cash flow predicts a business’s future cash flow, helping management identify potential cash flow shortages and operational problems. It lists sources of income and expenses, including fixed and variable costs, and is based on existing evidence. The accuracy depends on the time scale involved. A pro forma cash flow is a statement […]
A cash line of credit is a type of revolving credit where a financial institution extends a specified amount of credit from which a borrower can withdraw money in cash as often as they need, as long as they do not exceed the maximum amount of credit. The line of credit remains open for future […]
Cash budgeting is a tool that helps businesses track cash movements and estimate expenses. It can also help reduce expenses and control costs, and involve all managers in the budget process. The cash budget is a tool that businesses can use to track all cash movements within their businesses. Both inputs and outputs are written […]
Cash value life insurance is a more expensive type of permanent insurance where some of the premiums paid are invested or saved, and the policyholder can access this value over time. While it offers security, critics argue that it is not a good investment strategy compared to buying term insurance and investing the difference. However, […]
Cash flow statements analyze revenue inflow from various sources, including investments and financing activities. The structure is essential for accurate cash flow analysis and consistency between periods. Preparing a cash flow statement allows for quick identification of changes in revenue-generating processes, and it is now easier than ever with accounting software. Cash flow statements are […]
Cash control is a process used to verify the accuracy of all cash received and disbursed in any setting where goods and services are bought and sold. It involves documenting and recording all transactions immediately, limiting access to cash, and keeping task-related documents separate from physical cash. Cash control is a process used to verify […]
ATMs, cash back at stores, and bank tellers are common ways to withdraw cash. ATMs are convenient but can be unsafe, while cash back allows for withdrawals during purchases. Bank tellers require a visit to the bank. There are three commonly used ways to withdraw cash from a bank account: using an ATM, getting cash […]
Petty cash is a small amount of money used by employees for incidental expenses below a certain amount, usually around $50 USD. It can be used for office supplies, meals, entertainment, local transportation, and refunds. It requires documentation and is usually managed by a supervising employee. There are limitations and exemptions, and it cannot be […]
A business cash advance is a loan based on credit card factoring, where the lender provides a lump sum in exchange for a percentage of daily credit and debit card sales. It’s an alternative to traditional business loans and is easier to qualify for, but has higher fees and interest rates. A business cash advance […]
A petty cash account is a small fund held within a business for small purchases when using checks or cards would be impractical. It is kept in a safe deposit box and only one or two people have access. Withdrawals and deposits are recorded in a ledger to prevent theft. The account is usually around […]
Perpetual cash refers to financial strategies that generate a continuous stream of income, such as perpetual bond issues and equity issues that provide steady dividend payments. Some financial schemes also offer perpetual cash flow, but it is important to research them thoroughly before investing. Perpetual cash is a term often used with financial strategies designed […]
Cash flow problems can arise from unpaid receivables, excess inventory, unexpected expenses, and overpayments to employees. Companies can manage receivables by offering discounts or requiring down payments. Unsold inventory is lost capital, and unforeseen expenses can strain cash reserves. Overpaying employees can lead to high expenses and fewer products to sell. Cash flow problems can […]
A cash flow budget estimates a business’s expected income and expenses for a year, helping it to plan for borrowing and loan repayment. Cash inflow is the money made, while cash outflow is the money spent. Cash flow shows the actual amount of money going in and out of the business, while the cash flow […]
Cash trading involves purchasing securities with cash only, while margin trading involves using a line of credit extended through a broker. Cash trading carries less risk, but limits investment opportunities. Many investors use a combination of both strategies. Cash trading is an investment strategy that requires the investor to make purchases of securities with cash […]
A cash audit examines cash transactions during a specific period to ensure they comply with accounting procedures and company policies. It can focus on specific transactions or be a full audit. The audit examines cash receipts, disbursements, and ensures they match up. It can identify accounting errors and is conducted at least once a year. […]
Monetary awards can be given as bonuses, scholarships, contest prizes, or court decisions. Companies use them to motivate employees or reward superior work. Scholarship criteria can vary, while competitions offer high prizes but are taxable. Monetary awards can also be part of divorce settlements. A monetary award can be any form of compensation or bonus […]
Cash advance fees are charged when a credit card holder withdraws cash from an ATM, with fees ranging from 2-4%. Some credit card companies charge additional interest and do not offer grace periods on cash advances. Payments are often applied to purchases first, leading to increased interest for those carrying balances. Cash advances should only […]
Cash management bills (CMBs) are short-term government guarantees used to offset cash shortages. They offer flexibility for monetary policy officials and can be used as quick investments, but are mainly sold to institutional investors. CMBs have short maturity periods, high interest rates, and minimum denominations starting at $1 million USD. They can be issued quickly […]
