Bank reconcilation

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

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

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.
 

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.

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.
 

Hi

Since as on preparation of Final A/c chqs are already cleared, no effect will come in financials..

Only you need to show them in BRS as chqs issued but not cleared...

Thanks

Thanks 

You means to say We can show these cheques in Bank as cheuqe not cleared and in April We can show this as opening balance in Bank a/c

No. you should not show this amt as your bank balance!!

U have already issued chq so you need to minus it from your bank balance!!

Thanks

Kapil pass these entries in your boos of account:

Example:

ABC Limited Dr.            XXXX

      To XYZ BanK Ltd.                XXXX

THEN

XYZ Bank Ltd. Dr.         XXXX

     To Cheque issued but not cleared    XXXX

(in the end your bank book balace will tally with Bank statement. In next year when ch)

Kapil pass these entries in your boos of account:

Example:

ABC Limited Dr.            XXXX

      To XYZ BanK Ltd.                XXXX

THEN

XYZ Bank Ltd. Dr.         XXXX

     To Cheque issued but not cleared    XXXX

(in the end your bank book balace will tally with Bank statement. In next year pass the following entry)

Cheque issued but not cleared Dr.            XXXX

      To XYZ BanK Ltd.                XXXX