Question

ACCOUNTANCY
⏺️What will be the journal entry for:

The cheque of Ramesh was dishonored. Rs. 2000


Please answer if you really know the answer. ​

Answer 1

Answer:

Ramesh's A/c - Dr Rs. 2,000

       To Bank A/c Rs. 2,000

Explanation:

For Ramesh's cheque to be dishonored, first, Ramesh would have given us a cheque.

Now, why would he give us a cheque? Probably because he bought goods or services from us.

Let's assume that he bought goods on credit. So, the journal entry will be:

Ramesh's A/c -Dr

       To Sales A/c

Because he is now our debtor (an asset) and increase in assets is debited.

Sales in an income and increase in income is credited.

When he pays us the cheque (assuming that we deposit the cheque on the same date), the journal entry will be:

Bank A/c -Dr

       To Ramesh's A/c

This is because one asset (bank) increases and the other asset (debtor Ramesh) decreases.

Now, Ramesh is not our debtor.

But, when the cheque is dishonored, he again becomes our debtor because we didn't receive the amt. from him.

So, Ramesh's A/c will be debited and bank a/c will be credited.

Ramesh's A/c - Dr

      To Bank A/c