Definition of Uncleared Cheque
An uncleared cheque is a cheque (check) that has been written and recorded in the payer’s records, but has not yet been paid by the bank on which it is drawn. In the U.S. accounting textbooks, an uncleared cheque is referred to as an outstanding check.
In the bank reconciliation process an uncleared cheque (or outstanding check) is deducted from the balance shown on the bank statement to arrive at the correct or adjusted balance per bank.
Example of Uncleared Cheque
On December 28, a company records and mails a check for $8,120 to one of its suppliers in another region of the country. As of December 31, the check has not yet cleared the company’s checking account. Therefore, this $8,120 check is an uncleared cheque or an outstanding check.
