Bank reconciliation doubt

2004 views 20 replies

Reverse Entry is to be passed when it becomes stale cheque and subsequently income to be booked .

Entry 1: you need to pass the reversal entry as the cheque cannot be encashed on the day it become stale cheque.

Entry 2 : You need to consider that Amount as Gift received from others and accordingly you should treat the same in books or you can treat that amount as Discount if that person gave away that amount in his business interest.

Either reverse this entry or delete the previous entry bcz same is not clered in bank.

I totally agree with Mr.Ravitheja.....With this u also must check supporting stating that , your creditor has waived his claim. Bcoz in today's world no buddy will waive his single rupee. Check that such transaction is not completed with any other way...........

pass reversal entry ,no income 

 

Cont.....

first you pass a entry see create an account of STALE CHEQUE LIABILITY and pass an entry

BANK A/c Dr

   TO STALE CHEQUE LIABILITY A/c

then balance is reflected in the account then if the party is interested to take the cheque then pass a entry 

STALE CHEQUE LIABILITY A/c Dr

   TO BANK A/c

otherwise write off it as credit balances written off 

STALE CHEQUE LIABILITY A/c Dr

    TO MISC INCOME A/c

This most appropriate method of accounting and other methods do exist but you have a proper control in this regard.


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