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General Accounting Discussions: post dated cheques

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  1.  
    • CommentAuthorsucceed33
    • CommentTimeJun 29th 2008
     
    How do we treat post dated cheques ???
    Thankful People: nelpcap
    • CommentAuthorsucceed33
    • CommentTimeJun 29th 2008
     
    I issued some post dated checks. So how should I treat them now ?
    Thankful People: nelpcap
  3.  
    If the post dated checks are actually in the possession of vendors for services received I would record them as being disbursed.

    Debit Expense
    Credit Cash in Bank

    If reconciling the bank statement then they would be listed as outstanding checks.
    Thankful People: nelpcap
    • CommentAuthornelpcap
    • CommentTimeJul 2nd 2008 edited
     
    I recommend that you adjust all post dated checks beyond the month of preparation of financial staements. This is because that even though you have issued the checks, your suppliers cannot present them to the bank as payment for your account within the period. Therefore, in my opinion, it is just right to recognize the liabiltity account for the period assuming that you have entered the checks already in your cash disbursements book.

    Entry per CDB:
    Accounts Payable XXX
    Cash in Bank XXX
    To record check payment.

    Adjusting Entry:
    Cash in Bank XXX
    Accounts Payable XXX
    To adust entries for post dated checks.

    Im assuming that youn are using accrual basis of account or voucher system.

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