Banking Transaction Financial Accounting Entries

Cheque Received From Customer

20) Accounting entry at the time of cheque deposit entry

Bank Cheque deposit account Debit
Customer Credit

21) Accounting entry after cheque has been cleared in the Bank statement Main Bank account
Debit Bank

Cheque deposit account Credit

22) The clearing criteria for updating the bank main account and bank sub account will be amount and document number which will be captured in the allocation field of the bank sub account. The items, which have not been cleared in the bank statement, will remain open in the bank sub account and will form part of the bank reconciliation statement.

Cheque Issued To Vendors

23) Accounting entry at the time of cheque issue

Vendor account Debit
Bank cheque payment account Credit

24) Accounting entry after cheque has been presented in the Bank

Bank cheque payment account Debit
Main Bank account Credit

25) The clearing criteria used for updating vendor account and Bank cheque payment account will be amount and cheque number. The cheques presented to the bank and are cleared are transferred to the bank main account. The remaining cheque issued will form part of the bank reconciliation statement.

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