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TPPF2206 · Jan 20, 2012, 03:54 AM

Hi All,

Need to create a Cash Clearing Account on our Chart of Accounts... a bit confused under what type of Main Account I should place it? Is it a Cash Asset?

Thank you

VicSco · Jan 21, 2012, 11:04 AM

Hi I always put the cash clearing account near the top of the current assets section of the balance sheet - just ahead of the bank account g/ls. Even though it is listed with the assets, it is just a clearing account used while posting and should have a zero balance whenever statements are produced.

TPPF2206 · Jan 21, 2012, 11:18 AM

Hi,
So what do you do when you post in Cash Clearing amounts that will clear in the Bank Account, however they do not do so by month end?
Do you leave it as a reconciling item?

Thank you!

VicSco · Jan 21, 2012, 04:26 PM

Hi I mostly use cash clearing for customer receipts. When I have posted a receipt into cash clearing and the deposit does not show on the bank statement (clear the bank) I still post the deposit to the g/l for the bank in that month and clear out cash clearing and then show the uncleared deposits on my bank reconciliation as outstanding.

TPPF2206 · Jan 21, 2012, 08:58 PM

Hi VicSco,

So you do that as a reversal... when then the following month comes in, and the deposit shows on the bank account, you post it against Cash Clearing & Bank and they then balance each other?

VicSco · Jan 22, 2012, 11:17 AM

Hello TPPF No not a reversal. At this point the posting for the month is done. The deposit amount has been posted to your g/l "bank" and your cash clearing g/l should be zero. The deposit does not show on the bank statement so to reconcile your gl bank balance and the balance shown on your bank statement, the deposit is listed as outstanding. You don't have to do anything at this point as next month the deposit will be shown on that statement but you posted it in the month in which it belonged for your records. Think of cash clearing as a place to put your customer's payments until you do up a deposit. When you post your deposit, you move your customers payments from cash clearing into your bank. If you have a balance when that process is done it means you have missed something. I hope this helps you.