accounting

This query is : Resolved

Sreedhar Atchutuni ACA,GradCWA (Querist)
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19 January 2009 a company has shown in its balance sheet Cheques on hand(cheques received from customers)seperately as a current asset.

Is the accounting treatment correct?

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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19 January 2009 Yes, it is correct. The situation arises in the following circumstances:

Suppose, a cheque has been received from a customer on the last day of the year and receipt to that effect has been issued. Now, the cheque is deposited in April in the next year. It is obvious that cheque remained in hand as on the last day of the year and will be booked and reflected as CHEQUE IN HAND as a Current Asset in the B.Sheet.