what will be the journal entry when a) a cheque is endorsed, b) a cheque is dishonoured??
pls tell and explain too why is it so?
thnx in advance...:)
5 Replies
lallan yadav
(na)
(21 Points)
Replied 31 December 2011
Creditor Ac-Dr
To bill receivable Ac
bcs when a bill is endorses the creditor is decreses and asset is also decreses
Rama chary Rachakonda
(Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294)
(6484 Points)
Replied 31 December 2011
Mr.Babban,
When cheque is dishonour the journal entry will be as follows:
Debit the Debtor or party name
Credit the Bank account
Narration of the transaction is Being the cheque no:.......dt:........is dishonoured by the bank.
Rohit Bhutra
(Article)
(34 Points)
Replied 31 December 2011
A) When the cheque is endorsed-
Creditors A/c ... dr
to Debtors A/c
Reasosn Being- u receive cheque from X & give to y. No bank balance of urs is incerasing or decreasing. Simply the balances of X & Y are affected. In narration u will write " Being cheque received from Mr. X is endorsed to Mr. Y".
B) When the cheque is dishonured-
Debtors A/c
to Bank A/c
Reason being - the cheque is dishonured so our bank balance does nt increases & due from debtor is not realised . So the opposite entry of being cheque received from debtors.
Jagjeet singh sahney
(CA)
(70 Points)
Replied 01 January 2012
(a)When the cheque is endorsed
Creditor a/c Dr
To Cash a/c
Reason is that when a cheque is received it is treated as cash if not deposited into bank on the same day
Hence when we endorse the cheque to a creditor we are giving assuming that we are giving cash
Here my answer is based on that the cheque is not endorsed to the creditor on the same day
(b) for dishonor of a cheque I agree with Mr. Rohit
Recent Topics
- Interest free loans from directors in private limi
- Section 194T
- Paying GST on Residential House Construction
- Gst credit ledger input
- Income Tax Filing after Portal Deadline
- LTCG u/s 54 -Time Period Related
- Clarification -GST registration
- TDS on commercial bus insurance payment
- Do we need Environmental Clearance certificate for
- GST Rate confussion
Related Threads
CAclubindia
