What is the Journal Entry for a Returned Check We Issued?

by Salam
(Qatar)

Q: Dear Sir,


Can you please explain what will be the journal entry when a check we issued is returned by the bank and when they reproduce it?

returned check


A:
The journal entry would be the exact opposite of the entry the bookkeeper made when issuing the check in the first place.

For example, if the original entry was:
Dr Creditors (liability)
Cr Bank


This means we issued a check to pay off one of our creditors.

...then the entry when the check was returned will be:
Dr Bank
Cr Creditors


This means we owe the creditor again and the bank account entry is reversed so our bank account is back to where it was before.

When you re-issue the check you simply redo the original journal entry.

Hope that makes sense! Good luck!

Best,
Michael Celender
Accounting Basics for Students

P.S. See further below for more comments and questions including a question about a returned check from a debtor...


Related tutorials:


Return to our page of Basic Accounting Questions

Comments for What is the Journal Entry for a Returned Check We Issued?

Click here to add your own comments

Returned check JE
by: Anonymous

We sent out a check for $1450.00, we returned it because it was encoded for $1460.00. What would the Journal Entry be? Both hit our statement for May. The vendor is depositing again.

Thank you.

I assume originally you recorded the check payment for $1,450 and that it's for a creditor:

Dr Creditor $1,450
Cr Bank $1,450

The reversing entry:

Dr Bank $1,450
Cr Creditor $1,450

This reverses the original entry and shows you owe the creditor again.

- Michael

ISSUED CHEQUE
by: Anonymous

Why are the two accounts for a cheque issued by any business are assets and bank?

The 2 accounts do not have to be assets and bank. It will always be Bank as the one account but the other account could be an asset account or an expense account - it depends what the cheque was used for.

- Michael

Click here to add your own comments

Return to Ask a Question About This Lesson!.

What are the Entries for a Returned Check from a Debtor?

by Mary
(Ghana)


Q: What are the entries for a debtor's returned check?

debtors returned check


A:
The entries are the opposite of what you did when you received the check.

When you received the check from the debtor, you should have recorded:

DR Bank
CR Debtor (asset)


Remember, a debtor is someone who owes your business.

The debit to bank means more money for your business and the credit to debtor means less debtors - less money owed to your business.

Now, when you discover that the check has bounced or is bad for some other reason, you should reverse what you did originally.

The journal entry would be:

DR Debtor (asset)
CR Bank


What you are showing now is that your bank account is less because you didn't received the funds into the account, and the debtor owes you the money again (debit debtor to increase it).

Hope that makes sense!

Best,
Michael Celender


Related tutorials:


Return to our page of Basic Accounting Questions


Click here to post comments

Return to Ask a Question About This Lesson!.











© Copyright 2009-2018 Michael Celender. All Rights Reserved. 
Click here for Privacy Policy.