Proving Cash
At times, the balance of cash as shown in Cash in Bank and in the checkbook stub does not agree with the balance appearing on the statements rendered by the bank. Generally, the cash in the bank account balance should agree with the checkbook balance if all:
- Cash receipts have been deposited.
- Cash payments have been made by check.
- Transactions have been journalized and posted.
Comparing the Cash in Bank account balance with the checkbook balance is called proving cash. Comparing these two cash balances regularly is part of the internal control of cash. Businesspersons prove cash daily, weekly, or monthly.