Noncash Item


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.

BREAKING DOWN '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of time during which both banks have the funds available to them (between when the check is presented and the money is withdrawn from the payor's account) is called the float.

  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. Retirement

    The History Of The FDIC

    Find out why this corporation was developed and how it protects depositors from bank failure.
  9. Options & Futures

    Demystification Of Bank Accounts

    Find out which type of account suits your specific needs.
  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.
  1. Does working capital include salaries?

    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>
  2. What is a profit and loss (P&L) statement and why do companies publish them?

    A profit and loss (P&L) statement, or balance sheet, is essentially a snapshot of a company's financial activity for ... Read Full Answer >>
  3. How do dividends affect the balance sheet?

    Dividends paid in cash affect a company's balance sheet by decreasing the company's cash account on the asset side and decreasing ... Read Full Answer >>
  4. Who actually declares a dividend?

    It is a company's board of directors who actually declares a dividend. The declaration date is the first of four important ... Read Full Answer >>
  5. Are dividends considered an expense?

    Cash or stock dividends distributed to shareholders are not considered an expense on a company's income statement. Stock ... Read Full Answer >>
  6. Do dividends go on the balance sheet?

    The only account recorded on the balance sheet, when dividends are declared and before they are paid out to a company's shareholders, ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  2. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  3. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  4. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  5. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  6. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!