Accounting treatment of cheques

Hi gaurav,

entry in books will be

Bank A/c.... Dr

To party account

and your bank balance increases, however if you see the bank pass book or statement it will not tally that difference will be solved in bank reconciliation, that kind of differences will be there

some people maintains seperate account for this kind of transactions like

cheques pending for deposit A/c.... Dr

To party account

once deposited

bank A/c....Dr

to cheques pending for deposit A/c

this is the difference between two

2) in case of balance sheet it will be shown in bank ( as a current asset) however if the cheque is not deposited until 3 months then it becomes stale and the entry originally passed will be reversed.

3) even for company or individual the accounting is same