Noncash Item

AAA

DEFINITION of 'Noncash Item'

1. A check or other negotiable item, such as a draft, deposited into a customer's account but not credited to the account until it clears the issuer's account.

2. An income item on a business's financial statement (e.g., donation, capital depreciation, investment gains or losses) that does not affect its cash flow.

INVESTOPEDIA EXPLAINS 'Noncash Item'

Banks will often put a hold of up to several days on a large noncash item, such as a check for several thousand dollars, depending on the customer's account history and what is known about the payor (e.g., if the issuing organization has the financial collateral to cover the check presented).
The short period of time during which both banks have the funds available to them (between when the check is presented and the money is withdrawn from the payor's account) is called the float.

RELATED TERMS
  1. Float

    Money in the banking system that is briefly counted twice due ...
  2. Canceled Check

    A check that has cleared the depositor's account and has been ...
  3. Check Hold

    Denotes a period of time equal to the maximum number of days ...
  4. Check

    A written, dated and signed instrument that contains an unconditional ...
  5. Check Clearing For The 21st Century ...

    A federal law that took effect on October 28, 2004, and gives ...
  6. Float Time

    The amount of time between when an individual writes and submits ...
Related Articles
  1. Insurance

    Bag The Best Bank Account

    Take advantage of the deals banks offer, and find the right account for your financial situation.
  2. Savings

    Are Your Bank Deposits Insured?

    Learn how the FDIC is helping to keep your money in your pockets.
  3. Credit & Loans

    Credit, Debit And Charge: Sizing Up The Cards In Your Wallet

    Not all plastic is equal! Learn the difference between the three kinds, and how each can affect your finances.
  4. Savings

    Online Banks: Lower Costs And Little Sacrifice

    For many, online banking has become a day-to-day routine. Still, there are some holdouts who refuse to accept the method.
  5. Options & Futures

    The Ins And Outs Of Bank Fees

    These service charges could nickel and dime you right out of your nest egg.
  6. Insurance

    Your First Checking Account

    This owner's manual will show you what to expect from your bank.
  7. Options & Futures

    Choose To Beat The Bank

    From internet banking to credit unions, it's in your power to cut fees and maximize service.
  8. Options & Futures

    Demystification Of Bank Accounts

    Find out which type of account suits your specific needs.
  9. Retirement

    The History Of The FDIC

    Find out why this corporation was developed and how it protects depositors from bank failure.
  10. Personal Finance

    Cut Your Bank Fees

    Find out how to get the bank to pay you for using their services, not the other way around.

You May Also Like

Hot Definitions
  1. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  2. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  5. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  6. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
Trading Center