Cheques and Bills
·
It
is a suspense head under the Major Head "L-Suspense and Miscellaneous"
suspense accounts
·
Object: To keep a watch over the Cheques issued by a Railway.
·
What
is Cheques & Bills ? It is nothing,
but similar to Bank A/c Operated in Commercial Accounts.
Example:
Salaries Rs. 20,000 /-paid by the firm through cheque. Journal entry is as follows.
|
Date
|
Particulars
|
Debit
|
Credit
|
|
--
|
Salaries
A/c
|
Rs.20,000
|
|
|
----
|
To Bank
|
|
Rs.
20,000
|
In Railways, Salary of
SSO/A Rs.20,000 paid by the Railways.
|
Date
|
Particulars
|
Debit
|
Credit
|
|
--
|
Erstwhile
Demand No.03
|
Rs.20,000
|
|
|
----
|
To Cheques & Bills A/c
|
|
Rs.
20,000
|
·
The only difference between Commercial firms and Indian Railways is,
that we operate Cheques and Bills A/c instead of Bank A/c.( Deposit with RBI
A/c in case of Indian Railways)
·
Deposit
with RBI A/c of Indian Railways is similar to Bank A/c of commercial firms
·
The
reason is why Deposit with RBI A/c is not operated is that the cheques issued
are not encashed immediately at the Bank and thereby affecting the Railway
Account in RBI i.e., Deposit with RBI.
·
To
keep a watch over the cheques and avoid excess payment, Cheques and Bills
suspense A/c is operated.
Journal entries – Flow of
Cheques and Bills Account
1.
When
payments are made by Railways
|
Date
|
Particulars
|
Debit
|
Credit
|
|
--
|
Respective
Demand No.__ Dr
|
Rs.20,000
|
|
|
----
|
To Cheques & Bills A/c
|
|
Rs.
20,000
|
2.
When
individual Cheques are encashed by the parties at PSBs (Public Sector Banks)
|
Date
|
Particulars
|
Debit
|
Credit
|
|
--
|
Cheques
& Bills A/c Dr
|
Rs.20,000
|
|
|
----
|
To PSB Suspense A/c
|
|
Rs.
20,000
|
Or Cheques & Bills
A/c is Minus Credit
3.
When
the PSBs (Public Sector Banks) adjust the amount of payment of encashed cheque
against RBI (Reserve Bank of India)
|
Date
|
Particulars
|
Debit
|
Credit
|
|
--
|
PSB
Suspense A/c Dr
|
Rs.20,000
|
|
|
----
|
To Deposit with RBI A/c
|
|
Rs.
20,000
|
Or PSB Suspense A/c is
Minus Credit
·
Net of the above 3 journal
entries is
|
Date
|
Particulars
|
Debit
|
Credit
|
|
--
|
Respective
Demand No.__ Dr
|
Rs.20,000
|
|
|
----
|
To Deposit with RBI A/c
|
|
Rs.
20,000
|
Cheques and Bills
Reconciliation :
Proforma
|
|
|
January, 2018
|
February, 2018
|
||||
|
Cheque No.
|
Date
|
Credit
|
Minus Credit
|
Credit Balance
|
Credit
|
Minus Credit
|
Credit Balance
|
|
001
|
01.01.2018
|
Rs.20000
|
-
|
Rs.20,000
|
-
|
Rs.20,000
|
Nil
|
|
002
|
02.01.2018
|
Rs. 1000
|
Rs.10000
|
Nil
|
-
|
-
|
-
|
|
003
|
03.01.2018
|
Rs.1000
|
Rs.10,000
|
(-) Rs.9,000
|
-
|
-
|
(-) Rs.9,000
|
·
The
issued cheques are entered as Credit in the month of issue. Whenever the cheque is encashed at the
concerned bank, the same is entered as Minus credit in the month, it encashed.
·
It
always show Credit Balance and will represent the amount of unencashed
cheques. Suppose, in any case the balance against any
cheque show Debit balance or Minus Credit balance, it is either fraud /excess
of cash paid by the bank against the cheque. Example is Cheque No. 003 of the
above table. This fraud or excess payment by the Banks is found only by
reconciliation of Cheques & Bills.
·
The
cheques drawn statement is prepared by the Accounts officer indicating the
cheque number, the bank and the amount of cheques. The total amount of the
cheque drawn is reconciled with the amount shown in the General Cash book under
cheques & bills.
·
When
Individual cheques are encashed: Public Sector Bank branches forward
(through their Focal Point branch) Daily Main Scrolls accounting for individual
cheques encashed. After verification of the statement (either manually or
through IPAS) received from focal point branch, the DMS-Date wise Monthly
Statement, the amount there of will be adjusted.
·
Uncashed
cheques for more than 6 months old, the amount cheques is written back from the
Cheques and Bills Head duly transferring the same to Sundry earnings.
|
Date
|
Particulars
|
Debit
|
Credit
|
|
--
|
Cheques
& Bills A/c Dr
|
------
|
|
|
----
|
To
Sundry Earnings A/c
|
|
------
|
Or Cheques and Bills A/c is Minus Credited.
·
The monthly
reconciliation of cheques and bills is
made and balance under the head "cheques and bills" at the end of
every month is reconciled with the General books and a certificate of
reconciliation is recorded on the final reconciliation register of cheques and
bills under the signature of Gazetted officer.
Para 444 of Accounts Code:
Reviewed Cheques & Bills Suspense A/c Balance reviewed - every six months.
The amount of cheques, remaining uncashed for more than six months after the date of issue should be credited to 'Abstract Z 650 other unclassified or to the work concerned according as the transaction relates to working expenses or works respectively.
The particulars of all uncashed cheques so adjusted in accounts should be kept in a special register to be maintained for the purpose to facilitate disposal of requests for fresh cheques that may be received subsequently.
·
Now, due to IPAS,
the entire mechanism of Cheques and Bills Suspense Account is done through
Programme.
*****
