Where Do We Record A Cheque That Was Supposed To Pay The Creditors But Suddenly Lost

When a Cheque / Check is lost or stolen it is a loss for the company. In that case, the company must inform the bank to stop payment on that cheque in order to avoid unauthorized use of it and loss to the company so that the company will use another cheque to make payments to creditors / suppliers / vendors.

The journal entry to record is shown below:

                                               Loss On Cheque a/c  XXX

                                                                                 Cash a/c  XXX

                                                             (Cheque Lost Recorded)

 

Loss on cheque is an Expense Account for the company’s business, so we debit it. As cash, which is recorded on Balance Sheet, is not collected from the bank, so it is decreased for the company’s business, so we credit cash account. Loss on cheque is recorded in Income Statement under “General and Administrative Expenses”.