What does it mean to sit on cash in accounting?

Sitting cash refers to the meaning of spending directly from the cash received (business income is business income) after receiving cash (business income is business income).

The cash paid by the opening unit can be paid from the cash limit of the inventory of the unit or withdrawn from the opening bank, and shall not be paid directly (i.e., sitting and disbursing) from the cash income of the unit (i.e., operating income). If it is necessary to sit and withdraw cash due to special circumstances, it shall be reported to the depositary bank for examination and approval in advance, and the depositary bank shall verify the scope and limit of the expenditure. The unit shall regularly report to the opening bank the amount and use of the payment.

However, if you do not operate according to the two lines of financial revenue and expenditure, confuse the two, and the income is not deposited in the bank, but is directly used to pay for daily expenses such as unit purchases, expenses, and loans, so that you can sit on cash.

That is, after the enterprise receives cash income, it is not deposited in the bank, but directly used to pay for other expenses, which is called sitting on cash. The Accounting Law stipulates that the cash income of an enterprise shall be deposited with the bank on the same day, and the cash paid by the enterprise may be paid from the cash in the inventory of the enterprise or withdrawn from the bank where the account is opened, but shall not be paid directly from the cash income of the enterprise.

Cash received by the cashier in the course of business processing (sales revenue or other income) should be deposited in the bank according to the financial system, and cash should be withdrawn from the bank if there is an expense (reimbursement). However, there are many companies that directly use the cash they receive to reimburse, which is called "sitting on cash" in accounting jargon.

Sitting on the expenditure, that is, the cash received is paid directly without recording the cash journal, and the payment is not recorded.

In the case of two lines of income and expenditure, there is a saying that the sales money received is not recorded in the account and is directly spent.

That is, after receiving the cash, it will not deposit to the relevant bank, and it will be directly counted as the expenditure of income and turnover, and it can also be withdrawn from the relevant unit to open the bank, but it is not allowed to pay directly from the turnover of the relevant unit.

Pay your earnings directly without going through the bank.

Sitting cash means the amount of cash received on the day. The consequence of sitting on cash is that it can lead to the loss of cash, it can lead to counterfeit cash, it can lead to the destruction of banknotes, and it can also lead to unclear records.

This term means that the unit or group will take out some of the cash from the unit, and then use it for cash payment, which may lead to poor operation of funds, which has constituted an illegal act and may affect the operation of the enterprise.

That is, after receiving the cash, there is no bank, and the money is directly used to support the daily expenses of the enterprise. The consequences are particularly serious, affecting the reputation of the enterprise, and also causing the enterprise to be fined and punished.

What is. "Sitting on cash? "That is, the income is not recorded in the account, it is directly spent, and then recorded in the form of bills. The biggest disadvantage is the inability to restrain unreasonable fees.

To put it bluntly, it is the cash income obtained, which is not deposited in the bank, but is directly used to pay the company's expenses or expenses. It is not allowed to sit on the back in the accounting system.