Cheque / Check Received And Deposit Journal Entries [With More Cases]

Cheque or check received and deposit journal entry involves into four parts due to different situations:

(i) Journal Entry For Cheque Received From Customers And Deposited Into Bank, Usually on the Same Date

(ii) Journal Entry For Check Received From Customers but not Deposited Into Bank on the Same Day Due To Some Valid Reasons

(iii) Journal Entry For Encashment from Accounts Receivable’s Bank Account

(iv) Journal Entry For Endorsement To An Accounts Payable or A Creditor

(i) When cheque / check is received from customers and deposited into bank account, then we debit bank account and credit accounts receivable or debtor account as shown below:

 

                                            Bank a/c  XXX

 

                                                         Accounts Receivable a/c  XXX

          (Received Cheque From Customer And Deposited Into Bank on the Same Day )

 

(ii) If we received the cheque but not deposited this cheque into the bank account of company on the same date due to some valid reasons, then we record the two entries. Firstly for cheque received but kept in cashier custody and secondly for cheque deposited into bank account after few days.

(a) 

                                              Cash a/c  XXX

 

                                                              Accounts Receivable a/c  XXX

 

                               (Check Received From Customer but not Deposited into Bank)

 

Suppose, after two days, the cashier of the company deposited the cheque into bank, then we record following Contra Entry as shown below:

(b)

 

                                              Bank a/c  XXX

 

                                                             Cash a/c  XXX

 

                                              (Cheque Deposited Into Bank)

If we join (a) and (b), then the result will be the same as in case of cheque deposited into the bank on the same day.

(iii) Suppose, we received cheque from customers and encash it from accounts receivable’s bank, then we record the following entry:

                                                 Cash a/c  XXX

 

                                                               Accounts Receivable a/c  XXX

                                  (Cheque Received From Customer And Encashed)

 

(iv) If we received cheque from customers and endorse it or transfer the ownership of cheque to accounts payable or creditor rather than deposited into bank account of the company, then two entries are recorded. One for cheque received and other one for endorsement as shown below:

(x)

                                             Cash a/c  XXX

 

                                                           Accounts Receivable a/c  XXX

 

                                             (Cheque Received From Customer)

 

(y)

 

                                          Endorsee a/c  XXX

 

                                                             Cash a/c  XXX

  

                                          (Cheque Endorsed To Creditor)