Cheques in Hand
Poornima C (35 Points)
18 May 2021
Is there any scenario where cheques in hand can show negative balance.
Poornima C (35 Points)
18 May 2021
CMA Poornima Madhava
(CMA)
(13097 Points)
Replied 18 May 2021
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 18 May 2021
It acts like a contra item. Example
1. ABC debtors a/c 5000
To Sales a/c 5000
2. Purchases a/c 2000
To XYX creditors a/c 2000
you received a post dated cheque for 5000 from debtors, issued a post dated cheque for 2000 for creditors today. So you made following entries like following and bank balance is 10000
1. Cheque a/c
ABC Debtors a/c
2. XYZ creditors a/c
To Cheque a/c
here cheque means bank. In the balance sheet we can show it as
By Bank a/c 10000
post dated cheque +5000
post dated cheque -2000
because this amount is not deducted or deposited from/into the bank yet. It depends upon the accounting software architecture.
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