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of time during which both banks have the funds available to them (between when the check is presented and the money is withdrawn from the payor's account) is called the float.

RELATED TERMS
  1. Outstanding Check

    A financial instrument that draws on the funds in an individual's ...
  2. On-Us Item

    A check or draft that is presented to the bank where the check ...
  3. Checking Account

    A transactional deposit account held at a financial institution ...
  4. Available Balance

    Balances in checking or on-demand accounts where there is a delay ...
  5. Negative Float

    The period of time between when a bank customer writes a check ...
  6. Itemized Statement

    A periodic statement issued by a financial institution, such ...
Related Articles
  1. Personal Finance

    Explaining Checking Accounts

    A checking account is an account at a financial institution, usually a bank, that allows for deposits and withdrawals.
  2. Investing

    Demystification Of Bank Accounts

    Find out which type of account suits your specific needs.
  3. Personal Finance

    What's a Bank Draft?

    A bank draft is a type of check. The bank guarantees payment, making it a more attractive option for the check recipient.
  4. Investing

    What is a Demand Deposit?

    A demand deposit is any type of account where the money in the account may be withdrawn at any time without prior notice to the financial institution.
  5. Managing Wealth

    2015's Top Checking Account Promotions

    Open a checking account in 2015 and the bank could give you a cash bonus. Check out these top offers.
  6. Investing

    Financial Statement: Extraordinary Vs. Nonrecurring Items

    When it comes to analyzing a company, successful analysts spend considerable time differentiating between accounting items that are likely to recur going forward from those that most likely will ...
  7. Personal Finance

    What is an Account Balance?

    An account balance represents the total amount of money in a financial account at any given moment.
  8. Managing Wealth

    Top Premium Checking Accounts of 2015

    Which banks offer the best deals for premium checking accounts – and what do you have to do to qualify for one?
  9. Investing

    Cash Flow Statement and Financial Health

    A cash flow statement records the amounts of cash and cash equivalents entering and leaving a company.
RELATED FAQS
  1. How do you calculate payback period using Excel?

    Understand the various fees that can be assessed on a personal or business checking account, and learn methods to avoid being ... Read Answer >>
  2. What is the difference between net income and cash flow from operating activities?

    Learn how net income differs from cash flow from operating activities and how noncash expenses and changes in working capital ... Read Answer >>
  3. For what types of accounts are demand deposits available?

    Learn about the different types of accounts designated as demand deposit accounts, such as savings accounts and money market ... Read Answer >>
  4. What are the differences between preference shares and bonds?

    Learn what information banks keep on file for their customers, and understand how this information can be used to deny an ... Read Answer >>
  5. How long does it take a check to clear?

    It usually takes two days for a check to clear, but in some cases it may take longer. Discover how banks treat large deposits ... Read Answer >>
  6. What is the difference between a cash flow statement and an income statement?

    Learn how a cash flow statement measures the sources and uses of a company's cash, while an income statement measures a company's ... Read Answer >>
Hot Definitions
  1. IRS Publication 970

    A document published by the Internal Revenue Service (IRS) that provides information on tax benefits available to students ...
  2. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  3. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  4. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  5. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  6. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
Trading Center