Cancelled Cheque Treatment

[zulfiqarqalandar]

Salam,

Please guide me about what is the treatment 0f canceled checque in Bank Statement.

Regards,

Zulfiqar Ahmad Qalandar...

[kamranACA]

Dear

The cheque issued by you, unless presented to bank for clearance and debited to your account by bank, is not and cannot be recorded by bank in his records ie in your bank statement.

So, if such a cheque is cancelled by you (of course before presentation to bank), it will have no effect/treatment in bank statement. That's why it appears in reconciliation statement as a reconciling item.

You will simply reverse the accounting etry in your books which you passed while issuing the cheque.

Upon reversal of such entry the bank account balance in your books will increase and equalize the balance appearing in bank statement (assuminh no other reconciling item). Therefore, such cheque will also cease to appear in reconciliation statement.

Regards,



Kamran.

[Ali.ismail]

Wassalam.. Cancelled cheques/ bounced cheque/dishonored check ... When you write some one a cheque but you dont have enough money in your bank account.. The cheque is returned saying refer to drawer... When you pay some one by cheque the double entry is
Dr Receivable ( In case your paying the cheque to your receivable)
Cr bank (bank is being credited coz the assets cash is decreasing)

And if in case because of any reason the cheque is cancelled the double entry will be reverse of above
Dr Bank ( Cash is returned so asset is increasing again )
Cr Receivable ( debiting receivable coz we are again increasing the receivable as the cheque has been cancelled) Hope it helps )