When a cheque is received it will be treated as cash, what if we issue cheque and what if cheque is not deposit. And explain why we treat cheque as cash
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Cheque issued but not presented for payment is a cheque which has been written and sent to the suppliers or creditors by the business. However, it has not yet been presented at the bank by the suppliers or creditors. So, the business records such cheques in the cash book before it is recorded in the pass book by the bank.
Thus, such cheques reduce the balance as per cash book and not balance as per pass book.
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