- This topic has 5 replies, 2 voices, and was last updated 7 years ago by
.
- Posts
Dear Sir,
Dishonoured cheques are cheques received from customer and banked but then returned unpaid (“dishonoured”). As far as I understand, dishonoured cheques should not be recorded in the Bank Statement because the bank only credits their customer’s account when they actually receive cash!
However, I read from a book that “a cheque was return unpaid and shown as a debit on the bank statement” (I understand from this statement that in this case, the bank had previously credited that cheque even though there was no cash received or no funds transferred in).
Can you please help to give a comment on this?
Thank you so much!
Kind regards,
PhuongThe bank will usually credit the account when you pay in the cheque. They then send the cheque to the other bank and if the cheque is returned to them as dishonoured, then they will debit the account to cancel it.
Dear Sir,
Thank you so much for your help. However, I think I am still missing something because I am wondering that: if a bank commonly works that way (credits your account as soon as you pay in the cheques) then there would be very little chance for outstanding lodgements? This is because outstanding lodgements are defined as cheques paid into the bank but not “cleared” (“credited”) yet?
Thank you so much!
Best Regards,
PhuongBut that would assume that you took the cheque to the bank the minute that you received it (and that the bank processed it immediately).
Neither is the case. I receive cheques (and enter them in my cash account when I receive them) but I don’t go to the bank with them immediately. (In fact I send them to the bank by post which takes even longer 🙂 )Yes, that’s such a release 🙂
Thank you for your thorough explanation, that really clears my confusion.
Best Regards,
- The topic ‘Bank reconciliation – Dishonoured cheques’ is closed to new replies.