What is a certificate of deposit?
A certificate of deposit, also referred to as a CD, is a time deposit at a bank, credit union, or other financial institution. However, the certificate of deposit cannot be withdrawn until an agreed upon date known as its maturity date. If a withdrawal becomes a necessity, the financial institution will assess a penalty—usually the loss of interest.
A depositor will earn more interest on a certificate of deposit than the amount earned on a savings account or money market account. The length of a certificate of deposit could be one month, three months, six months, one year, 17 months, three years, etc. Generally the longer the time until maturity, the higher the interest rate.
A CD that matures in less than one year will be reported by the bank as a current liability, and will be reported as a short-term investment by the depositor (provided the amount is not restricted by the depositor).
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How do I adjust my cash books against my bank balance for cheques that was issued last date of the previous month but was only presented and cleared under the current calendar month?
You will have to prepare a reconcilliation statement, this will enable u to get the correct figures for both the c.b n the b. statement.
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