When the cheque received from customer is endorsed, it is recorded
(a) On receipt side cash column (b) On receipt side bank column
(c) On payment side cash column (d) On payment side bank column
Answers
Answer:
Endorsed cheques are always recorded on the payments side in the cash column (and not in the bank column) of the cash book. The endorsed cheques so received are treated as Cash-in-Hand and when these cheques are endorsed, then Cash A/c is credited.
A bearer cheque received from a party and not deposited in the bank, can be given to any third party for making the similar payment to the latter. This is known as endorsement. On endorsement of cheque to the third party the cash column must be reduced so that it gets recorded in the cash column on the credit side of the cash book. It should be noted that when the cheque was received, it must have been recorded in the cash column on the debit (receipt) side of the cash book.
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