Cheque received

Hi

Yes, there is a general practice to pass following entries-

on 01-04-2015 (Cheque in Hand) Dr 1000

To Mr. X  1000

and on 7-04-2015 (Bank A/c) Dr 1000

To Cheues in hand 1000

By passing above entry on 01-04-2015 we'ill be able to trace/track our cheques as well.

Generally, we pass the entry as and when it is issued because there transactional effect will be reflected in BRS only.

hi..

I disagree with Rajeshji...no doubt answer was given from practical angle and it might be done but it's not possible when such issues are faced in Examination.

As per the basic rules of Account, when cheque received by us but not deposited into the bank account as on that date following Journal Entry should be passed :

Cash Account                  Dr   10,000

          To Mr X Account                          10,000

When cheque is deposited in the bank account as that date:

Bank Account                Dr     10,000

         To cash                                        10,000

Reason:

01. Debtor should be credited as on the date when he/she issued the cheque.

02. Bank Account can't Dr if cheque is not deposited, therefore we open cash account for adjustment of this transaction.

You can find this transaction in the books of standard 11 for your reference.

You Should Pass an Entry when it is reflected in your Bank Statement i.e on 7th April. (As Cheque received and cheque payment entries are done on the basis of bank statement) no need to complicate and pass two entries.

Originally posted by : Kumar Gaurav
	I disagree with mr. Bhargav because practically if we debit cash account on receipt of cheque then our cash ledger ill show wrong balance ie' inflated balance till deposition of same cash into bank.

Agree sir. But it's given in the syllabus text book. Even if you think practically then..CASH is very flexsible to use...no body is 100% maintaining it as uselful it is...."Cheque on hand" Account should be opened. It's genunine solution..

thanx for correct me..

Dear Gaurav

Will Cheque in Hand account will be opened under Current Assets in Tally?

Gaurav, when we issue cheque but have not given it to the party in whose favour we issued it, then can be pass the following entry

Party

to cheque in hand

and when we give the cheque to the party

cheque in hand

To Bank

Please advise

Regards

the entries are to be made in the books of account as and when the cheque is received or cheque is handed over to the party.

for differences between the cheque received date & Cheque clearance in bank, you to maintain bank reconciliation book.

@ Ms. Shivani-

Yes, it can be opened under Current assets in tally

Whenever, you received PDC cheque. 

Dr. Cheque in Hand

Cr. Party name

& On deposition

Dr. Bank

Cr. Cheque in hand

Rest, bank reco. will take the affect of pending entries accordingly.

Dear Gaurav

I understand that opening Cheques in hand account let us keep record of cheques which we possess and havent deposited in bank.

But by following this method, in Bank Reconciliation in Tally, all i see is Cheques in hands everywhere, dont knowing cheque came from whom.

I feel that when we receive cheque we should debit bank and credit party and avoid cheque in hand.

we can always keep cheque register on excel to keep track of cheques.

regards