L.P. from Fairfield County writes:
Dear Mister Condo,
What is the meaning of “cash” on a financial monthly statement? Thank you!
Mister Condo replies:
L.P., without seeing the actual statement you are talking about, I cannot give you a definitive answer. Also, since I am not a CPA my answer may not suffice your needs. That being said, “cash” usually refers to liquid money available in one or more bank accounts that is available to be used for typical, short-term expenses. For instance, if a condo has $100,000 in monetary assets, that entire amount may not be “cash”. There could be $50,000 in the Reserve Fund, likely in the form of Certificates of Deposit (CDs) or bonds. The money is there but it is not readily available so it is not listed as “cash”. There may be Accounts Receivable due to the condo (items like common fees), which may show up as an asset, but it is not “cash”. There may also be small funds for miscellaneous expenses (under $500), which are “cash” but set aside in an expense box. Basically, if it represents money in a readily available checking or savings account, the entry on the monthly statement is likely to show up as “cash”. Just because cash appears on a monthly statement doesn’t mean it is available. Insurance premiums, for instance, come due at different times of the year. $10,000 showing one month may be going towards a $15,000 bill the following month. Hope that helps!