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HMRC internal manual

Enquiry Manual

Examining Accounts: Cash-Flow Tests

‘Minus Cash’ - Week 1

Cash transactions are isolated as follows

Week 1 £ £ £
Recorded: cash brought forward   200  
### Takings as recorded      
Monday 140    
Tuesday 162    
Wednesday 84    
Thursday 175    
Friday 182    
Saturday 276 1019  
### Cash available (brought forward and recorded)     1219
### Cash payments as recorded:      
Monday : Sundries 35    
Tuesday: Sundries 10    
Windows 15    
Wednesday: -    
Thursday: Sundries -    
Friday: Casual wages 120    
Saturday: Own drawings 180    
### Total Cash payments   (360)  
Wednesday: 400    
Friday 400    
### Total Banked   (800)  
Cash carried forward   (200)  
Cash used (spent, banked, carried forward)     (1360)
Deficiency (used - less available)     (141)

Casual wages and payments into the bank are capable of independent verification, drawings are unlikely to be overstated and sundries even if overstated are not large enough to have created the deficiency. The explanation for most if not all of it will be, one or both of

  • all takings were not recorded or
  • the amount brought forward or carried forward was incorrect.

If own drawings have been understated, the real deficiency will in fact be greater.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

A cash test run to the banking date (Friday) would still show a deficiency even assuming that all Friday’s takings were available for banking and no cash was carried forward to Saturday, that is

Cash available up to Friday (£200 + £743)   £943
Cash used to Friday £180  
Plus banked £800 (£980)
Deficiency   (£37)
An unexplained ‘surplus’ would arise on Saturday, that is    
Takings 276  
Own drawings (180)  
Alleged carried forward (60)  
‘Surplus’ 36