Accounting treatment for uncleared cheques

A/c entries 6275 views 3 replies

Aftaab

Student

101 Points Joined October 2010

i am an accountant. 1) in my company there is printer repair expense in march 2013. cheque paid on 15th march 2013. but it is cleared in next accounting year i.e april 2014. now to close the accounts, what entries i have to pass as still the amount is uncleared in bank. 2) In the month of May 2014 I issued a cheque towards rent but it cleared in June 2014. Now during reconciliation i found the same. do i need to reverse the entry in tally to match balance as per bank and cash book? or just preparing manual BRS statement is ok....please no explanation on preparing BRS statement..Just need to know wheter adjustment entries are needed in both cases

Replies (3)

Zoya Khan

ABC

800 Points Joined May 2013

for 1st I think no entry is required just show it in bank reco,but since 3 months have passed you have to reverse the entry

Stranger

5531 Points Joined December 2013

You are required to make the following entries in F.Y. 2013-14 :

1) Reversal entry should be made after 3 months of issuing cheque, i.e. on 15-06-2013

Bank A/c Dr.

To Computer Repairs & Maintenance A/c

Note : Prior period A/c shoudn't not be credited here as it's not due to any mistake or ommission in prior preriod (i.e., 1-4-2012 to 31-3-2013) but only a procedural accounting adjustment by way of reversal entry & there will be no diff in BRS as far as this entry is concerned in the F.Y. 2013-14.

2) First Method (common practice)

Rent A/c Dr.

To Bank A/c

Note : Show the diff. in monthly BRS

Second Method

(May)

Rent A/c Dr.

To O/s Rent A/c or Uncleared Cheque A/c

(Being cheque issued for rent but not cleared till date)

(June)

O/s Rent A/c Dr.

To Bank A/c