cheque clearing query

This query is : Resolved

krupali (Querist)
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19 February 2017 cheque issued amount of 36321 but not presented in bank till 31st march 2017. How I can show it in balancesheet of 31st march 2017

Vaibhav

Vaibhav (Expert)
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19 February 2017 In Balance sheet bank balance shows less by amounting of Rs. 36321/-.

krupali

krupali (Querist)
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19 February 2017 then How match bank balance and book balance?

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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19 July 2024 To address the situation where a cheque was issued but not presented to the bank by the balance sheet date (31st March 2017), and to reconcile the bank balance with the book balance, here’s how you can handle it:

### Showing the Cheque Issued in the Balance Sheet:

Since the cheque of amount 36,321 was issued but not presented to the bank by 31st March 2017, it represents an outstanding liability as of that date. Here’s how you can reflect it in your balance sheet:

1. **Current Liabilities (Under Notes to Accounts):**
- Include a note under Current Liabilities specifying the amount of cheques issued but not presented for payment as of 31st March 2017.
- This will typically be included under a sub-heading like "Other Current Liabilities" or "Contingent Liabilities."

2. **Narrative Disclosure:**
- Provide a brief description in the Notes to Accounts explaining the nature of the outstanding cheques and the amount involved.

Example:
```
Notes to Accounts:
As of 31st March 2017, cheques issued by the company amounting to Rs. 36,321 were outstanding and not presented for payment.
```

### Reconciling Bank Balance and Book Balance:

To reconcile the bank balance and book balance as of 31st March 2017, follow these steps:

1. **Book Balance (General Ledger):**
- Summarize all transactions recorded in your company's books up to 31st March 2017, including the issuance of the cheque for Rs. 36,321.

2. **Bank Reconciliation Statement:**
- Prepare a bank reconciliation statement as of 31st March 2017 to compare the book balance with the bank balance.
- Adjust for items such as:
- Outstanding cheques (like the Rs. 36,321 cheque not presented).
- Deposits in transit (if any).
- Bank charges or interest not yet recorded in the books.
- Errors or discrepancies between the bank statement and the book records.

3. **Bank Balance Adjustment:**
- Reflect the outstanding cheque of Rs. 36,321 as a deduction from the bank balance in the reconciliation statement.
- This adjustment ensures that the bank balance in the books reflects the actual funds available in the bank account after accounting for outstanding items.

### Bank Reconciliation Statement Example:

Assuming your bank balance per books (after adjustments) is Rs. X and your bank statement balance is Rs. Y, the reconciliation statement might look like this:

```
Bank Reconciliation Statement as of 31st March 2017:

Bank Balance as per Book (Adjusted) Rs. X
Add: Deposits in Transit Rs. [If applicable]
Less: Outstanding Cheques Rs. 36,321
Add: Interest Earned Rs. [If applicable]
Less: Bank Charges Rs. [If applicable]

Bank Balance as per Bank Statement Rs. Y
```

### Conclusion:

By following these steps, you can appropriately reflect the outstanding cheque in your balance sheet as a current liability and reconcile the bank balance with the book balance as of 31st March 2017. This ensures accuracy in financial reporting and compliance with accounting standards. If you have specific software or tools for reconciliation, use them to streamline the process and ensure accuracy in your financial statements.