Journal entry of cheque received from sumita of rupees 900 in full settlement of her account of 1000 returned dishonoured?

Question

Answer

Cheque in hand a/c Dr 900
discount allowed Dr 100
To sumita 1000
(being cheque received and discount allowed)

bank a/c Dr 900
To cheque in hand a/c 900
(being cheque deposited in bank )

sumita a/c Dr 900
To bank a/c 900
(being cheque Dishonored )

sumita a/c Dr 100
To discount allowed a/c 100
(being discount allowed reversed due to Dishonored cheque)

Answer

Cheque in hand ac dr
discount allowed ac dr
to sumita

Answer

Journal Entry for Cheque Received from Sumita in Full Settlement of Her Account of 1000 Returned Dishonoured

Background: Sumita, a customer, had an outstanding balance of rupees 1000 with our company. She issued a cheque of rupees 1000 to settle the account, but the cheque was returned dishonoured by the bank.

Step 1: Record the Dishonoured Cheque

Debit the customer's account by rupees 1000

Credit the bank account by rupees 1000

Step 2: Receive the Cheque

Debit the bank account by rupees 900

Credit the customer's account by rupees 900

Step 3: Close the Account

Debit the customer's account by rupees 100 (the remaining balance)

Credit the bad debts account by rupees 100 (as the amount is considered irrecoverable)

Explanation: The journal entry for the dishonoured cheque was to debit the customer's account and credit the bank account, as the bank had refused to honour the cheque. When we received the cheque of rupees 900, we debited the bank account and credited the customer's account for the same amount. Finally, we closed the customer's account by writing off the remaining balance of rupees 100 as bad debts.

Conclusion: The journal entry for the cheque received from Sumita in full settlement of her account of 1000 returned dishonoured involves recording the dishonoured cheque, receiving the cheque and closing the account. It is important to keep accurate records of all transactions to ensure smooth financial operations.

Answer

Çheque in hand a/c Dr
discount ac Dr
to summita

Answer

Post in cash book

Similar Commerce Doubts

Received full payment from sumit at a discount of 5% in full settlement of his account . So tell me what is the journal entry for this question?

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