Accounting status of stale cheque

5771 views

Save Share

Sumanta Das Gupta

Accountant

129 Points Posted on 02 June 2013

Dear Friends,

The accountant of a client company issued a cheque to a creditor in the last F.Y. 2011-2012 but it has not been paid till date and has remained with the client company as on 31.03.2013. However, the accountant passed the relevant entry in the bank book of the client for issue of cheque in the F.Y. 20111-12. The B.R.S. has also been prepared accordingly.

What will be the accounting treatment of the above and how will the entire event be presented in the Final Accounts of the client company for the year ended 31st. March, 2013 ?

Please, if somebody can reply urgently.

Thanking you and with best regards.

Replies (5)

Lalatendu Bal

49 Points Posted on 02 June 2013

you need to just reverse the entry and the amount will not stand in BRS and consequently the creditors balance would increase

Ganeshbabu K

Audit and Tax Advisory

37014 Points Posted on 03 June 2013

Originally posted by : Lalatendu Bal
	you need to just reverse the entry and the amount will not stand in BRS and consequently the creditors balance would increase

Yes, you can go as above,

just pass the reverse entry for bank payment entry

DS Sajwan

MBA

64 Points Posted on 03 June 2013

reverse the entry & reco both entries.

Durga Datta Dash

CA Final Student

65 Points Posted on 03 June 2013

Hi Sumanta

No need to reverse the entry... Just create a Ledger called Stale Cheque under Current Liability. Now Debit bank & credit Stale cheque.Which does not reflect in your bank reco & u can trace out the exact stale cheque payments which might be paid at further date.Simply reversing the entry may be right...

Thanx