Received a cheque from ABCand Co. to whom goods were sold for Rs.20000 and allowedthem1% discount. The cheque isn’t deposited into Bank. what is the journal entry?
Answers
Answer:
Explanation:
The entry will be
Cheques in Hand A/c Dr 19,800.00
Discount A/c Dr 200.00
To ABC & Co A/c 20,000.00
(Being Received a cheque from ABCand Co. to whom goods were sold for Rs.20000 and allowedthem1% discount. The cheque isn’t deposited into Bank)
Note:
1. Most of the companies prepare an Account , Namely 'Cheques in hand' so as to determine, how many cheques are in hand as on date. In these cases, cheques in hand should be debited.
2. In case 'cheques in hand' A/c is not maintained then it is customary to debit Bank A/c treating that the same has been deposited in Bank.
3. In caser the cheque has not been deposited, it may be treated as cash but when deposited in Bank, the entry will be as deposited cash in Bank.
In narration full details should be given.
I think, it will clarify the position.