Final answer:
A proof of cash is an extensive reconciliation process that compares and verifies bank-deposited cash receipts with cash disbursements records and ledger transactions to maintain accurate financial records.
Step-by-step explanation:
A proof of cash is a comprehensive reconciliation procedure that not only compares the cash receipts deposited in the bank with the records of cash receipts, but also involves the verification of cash disbursements. The process includes double-checking bank statements against ledger transactions, and it is a vital part of internal control systems, aiming to prevent and detect discrepancies, errors, or potential fraudulent activities. By reconciling these records for a given period, businesses can ensure their financial statements accurately reflect their cash position and transactions.