Unpresented cheque is the cheque that has not been presented to the bank. Although the business has written and accounted for the cheque in their books, the cheque has not been presented in the bank. So, to reconcile the unpresented cheque, we need to adjust the bank reconciliation statement.
Unpresented cheque is also referred to as an outstanding cheque. This type of cheque is deducted from the bank balance to reconcile the accounting record and bank statement.
Also read, uncredited cheques.
Detailed understanding
When the business accountant writes a cheque, cash is credited from the business books. However, it has not been presented to the bank. So, the bank will not be able to deduct the balance from your account. Hence, we need to assume that the cheque is presented to the bank, and they make a debit for the same. Hence, we need to debit the balance in the bank statement to reconcile the bank reconciliation statement.
Effect of unpresented cheque on the balance sheet
Unpresented cheques do have an impact on the balance sheet. When the business wants to pay someone, they issue a cheque. It’s a regular business operation. So, there is no need to change the accounting record. Overall, the impact of the unpresented cheque is a reduction in the balance of cash and bank. However, to adjust the bank and cash balance, we need to adjust the amount in the bank statement.
Difference between unpresented cheque and uncredited cheque
Unpresented cheques are the cheques that have not been presented to the bank. So, we need to adjust bank balance. On the other hand, uncredited cheques are the cheques that have been received by the business and recorded as debit of cash in the business books. However, the business has not submitted the cheque to the bank as of now. So, we shall assume that cheque is submitted to the bank, and the balance is added to the bank balance.
Bounce of unpresented cheque
Unpresented cheque may be bounced back due to any reasons. In such a case, we need to reverse the entry of cash received in the business books. The following entry will be posted in the business books when the unpresented cheque is bounced back.
| Particulars | Debit | Credit |
| Accounts receivables | XXX | |
| Cash and back | XXX |
It’s important to note that we do not need to adjust the bank statement for the bounced cheque.
Conclusion
Unpresented cheque is the cheque that the business has written, and the accounting record has been updated against it by the credit of cash and debit of accounts payable. However, it has not been presented in the bank as of the end of an accounting period. So, we need to assume that cheque has been presented in the bank and reconcile the bank statement.
The effect of unpresented cheques on the bank statement is that the cash is reduced once cheque is presented in the bank, and payable/liability is reduced. Further, it’s a correct accounting treatment and does not require adjustment in the books of accounts. Instead, we need to adjust the bank statement to reconcile with the bank.
