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.

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of time during which both banks have the funds available to them (between when the check is presented and the money is withdrawn from the payor’s account) is called the float.


Investment dictionary. . 2012.

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