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of time during which both banks have the funds available to them (between when the check is presented and the money is withdrawn from the payor's account) is called the float.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 FAQS
  1. How are contingent liabilities reflected on a balance sheet

    Contingent liabilities need to pass two thresholds before they can be reported in the financial statements. First, it must ... Read Full Answer >>
  2. How do businesses determine if an asset may be impaired?

    In the United States, assets are considered impaired when net carrying value (book value) exceeds expected future cash flows. ... Read Full Answer >>
  3. How can I set up an accrual accounting system for a small business?

    First, determine whether accrual accounting makes the most sense practically and financially. If the small business is also ... Read Full Answer >>
  4. Why is work in progress (WIP) considered a current asset in accounting?

    Accountants consider work in progress (WIP) to be a current asset because it is a type of inventory asset. Accountants consider ... Read Full Answer >>
  5. What are some ways a company can improve on its Return on Capital Employed (ROCE)?

    Options available to a company seeking to improve on its return on capital employed (ROCE) ratio include reducing costs, ... Read Full Answer >>
  6. What exactly does EBITDA margin tell investors about a company?

    EBITDA stands for earnings before interest, taxes, depreciation and amortization. EBITDA margins provide investors a snapshot ... Read Full Answer >>
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. 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.
  10. Options & Futures

    Who Backs Up The FDIC?

    The FDIC insures depositors against loss, but what happens if it runs out of money?

You May Also Like

Hot Definitions
  1. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  2. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  3. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  4. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
  5. Adverse Selection

    1. The tendency of those in dangerous jobs or high risk lifestyles to get life insurance. 2. A situation where sellers have ...
Trading Center