How to handle an unpresented cheque

Legacy KB ID: 628

Question

How do I handle an unpresented or stale cheque where I have had a NCG amount appear on my previous tax reporting (BAS)?

Answer

As the transaction forms part of a previous period’s financial reports and tax reporting, you cannot simply delete the cheque. 

How it is handled depends on what action is to follow. 

 

The payment is being abandoned:

Reverse the transaction with a General Journal:

1.    Obtain the details of the original payment

2.    Company > Make General Journal Entries

3.    Debit your Bank Account

4.    Credit the Expense account

5.    Include the original tax code on the credit line – in this case, NCG.

6.    Enter a memo like “Unpresented Cheque Number 123; Payee’s Name; original date”

7.    Date is today’s date

8.    Open the original payment and enter a memo like: “Unpresented cheque. Reversed 3/2/11”

9.    In the next Bank Reconciliation, tick off the original cheque (payment) and the reversing General Journal Entry (deposit).

 

If honouring the payment

1.    Obtain the details of the original payment

2.    Write a new cheque:  Bank > Write Cheques

3.    Complete details for cheque; Date is today

4.    Select your bank account for the Expense account

5.    Enter memo like “Replacement for Chq No 123; Payee; original date”

6.    Open the original payment and enter a memo like: “Unpresented cheque. Reversed 3/2/11”

7.    In the next Bank Reconciliation

a.    tick off the original cheque (payment) against the reversing Write Cheques entry (deposit)

b.    tick off the replacement cheque when it appears on the bank statement.

 

Note:  If the cheque is not stale then do not forget to stop the cheque with your bank. 

 

 

Additional Information

An alternate way is through a Cash Sale:

1.    Create a bounced/stale cheque item with the tax code NCG (if that's the code of the original document). The item should be an "Other Charge" item, and should point to the expense account used on the original purchase (either the cheque or the bill).

2.    Create a cash sale for the same amount of the cheque using the item that you have just created. This will take care of the tax amount, and also reverse the expense component.

 


Need more help?

Ask the Reckon Community at: https://community.reckon.com/categories/reckonaccounts

Or

Log a Support Ticket: https://www.reckon.com/au/support/

How did we do?

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