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    Accounting Standards Library
    Friday
    Jul292011

    What is a cash reconciliation?

    A cash reconciliation is the process of verifying the amount of cash in a cash register as of the close of business. The verification can also take place whenever a different clerk takes over a cash register. The procedure to follow for this cash reconciliation is as follows:

    1. Obtain a daily reconciliation form on which to document the cash reconciliation.
    2. List on the form the amount of beginning cash in the cash drawer, which may be broken down by individual type of bill and coin.
    3. Close out the cash register.
    4. List on the daily reconciliation form all cash collected, which may be broken down by individual type of bill and coin.
    5. Using individual cash and receipts in the cash register, summarize on the form the amount of receipts by cash, check, coupon, and credit cards.
    6. Using the cash register tape, summarize on the form the amount of gross sales, voided sales, and sales returns to arrive at a net sales figure.
    7. Using the cash register tape, summarize on the form the amount of receipts by cash, check, coupon, and credit card.
    8. Compare the totals on the form for cash, checks, coupons, and credit card receipts that are based on individual receipts and that are based on the cash register.
    9. Reconcile the differences between the two columns.
    10. Sign and date the form, and submit to a supervisor for review.
    11. The supervisor reviews the reconciliation form, as well as any explanations for discrepancies, and approves the form if he or she agrees with it.

    A sample of the reconciliation portion of the daily cash reconciliation form is shown below.

    Cash Reconciliation Form


    Money Collected
    by Type


    Sales Recorded
    by Type

     Difference
    + (over) / - (short)
    Cash collected $515.00   Cash sales $518.00   -$3.00
    Checks collected 84.50   Check sales 78.00   +6.50
    Credit cards collected  308.20   Credit card sales 308.20    0
    Coupons collected  0   Coupon sales 1.50   -1.50
       Total collected $907.70      Total recorded $905.70   +$2.00


    A cash reconciliation is not the same as a bank reconciliation, where you match the period-end bank account statement provided by your bank with your internal records for the same account, and adjust your internal records as necessary.

    Related Topics

    Bank reconciliation procedure
    What is a book balance?
    What is a post dated check?
    What is a restrictive endorsement?
    What is not sufficient funds?

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