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March 24, 2008

What is an unpresented cheque or check and does it require an adjustment to the balance sheet?

I define an unpresented cheque as a check that was written but has not yet been paid by the bank on which it is drawn. An unpresented check is also referred to as an outstanding check or a check that has not yet cleared the bank. Outstanding checks are deducted from the balance per the bank in order to arrive at the adjusted or corrected balance per bank.

When a check is written, it will be recorded as a credit to the Cash account in the company’s general ledger. Whether the check clears the bank or not, the company’s Cash account balance is proper. The Cash account balance will be presented on the balance sheet without any adjustment for unpresented or outstanding checks.

Learn more about Bank Reconciliation. Work three FREE Interactive Crossword Puzzles on the bank reconciliation topic. 

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About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years.

He is the author of the 2010 Master Accounting Download Package which has been praised for it's ability to simplify accounting in a way that anybody can understand.



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Comments

21 Responses to “What is an unpresented cheque or check and does it require an adjustment to the balance sheet?”

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  19. Janani Luwum on December 12th, 2009 8:24 am

    Thanks, However, a bit of clarity for me. What do you mean by “Whether the check clears the bank or not”?. Are u meaning check clearance by the bank or what exactly are you refering to? Thanks

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