Is it true that ,during journal entry, if the information says that payment made by cheque then we have to put this transaction in Bank A/C and if it is just written that cheque is received then we have to put this in Cash A/C ?
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Yes, for cheque paid, you have to credit Bank A/c as the money is being paid out of the bank account of the business.
For Cheque received, money is not added to the bank account of the business till the time the cheque is actually deposited in the bank. Thus, when we receive the cheque we have two options -
Debit Cash A/c
Debit Cheque in hand A/c
Although both the options are correct but the Cheque in hand method is more prominently used nowadays.
Hope this information clarifies your doubts.
Regards
For Cheque received, money is not added to the bank account of the business till the time the cheque is actually deposited in the bank. Thus, when we receive the cheque we have two options -
Debit Cash A/c
Debit Cheque in hand A/c
Although both the options are correct but the Cheque in hand method is more prominently used nowadays.
Hope this information clarifies your doubts.
Regards
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