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Bank reconcilation

Kapil Dhiman (Accountant) (304 Points)

24 November 2014

Please help me,I have issued some cheques on 29March2014 to parties from these 2 cheques are cleared but still 11 cheques remained uncleared so how we show this in books of accounts .

Plz help its urgent

Thanks in advance

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10 Replies

CA Saloni (Manager-Accounts & GST Consultant) (5124 Points)
Replied 24 November 2014

Dear kapil,

the cheques you have issued have been expired now, since the validity for any cheque is only 3 months.

So now make a back date entry in your books in july for reversal.

Bank_Dr

To party

Kapil Dhiman (Accountant) (304 Points)
Replied 24 November 2014

Hi Saloni,

My means is that I have issued cheque's in march from these 2 cheques are cleared in march and remaining cleared in april so that entry should be done in preperartion of Final accounts till march 2014

Parmod Kaushik (ASST. ACCOUNT MANAGER) (38 Points)
Replied 25 November 2014

Kapil....

At first create the head "Cheque issued but not cleared" and transfer these cheques under this head. This head will be shown in the balance sheet under current liabilities with the head of "Cheque issued but not cleared".

And next year as per clearing the cheques reverse entry will be posted in the books of account and at last cheque issued but not cleared head will become nil.

Kapil Dhiman (Accountant) (304 Points)
Replied 25 November 2014

Hi Parmod,

As you know we have paid cheques before 31 march so how can this become my liabilities as i have paid this earlier.

Parmod Kaushik (ASST. ACCOUNT MANAGER) (38 Points)
Replied 25 November 2014

You are right kapil, but payment not deduct from your bank account on 31st March. So it still your liability as on 31st March.

So, end of the month pass the journal entry with effect bank and "cheque issued but not cleared" head to reconsile your bank account with bank statement also.

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