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Unit-8 Banking Transactions and Three Column Cash Book

In this unit you will learn about the Three Column Cash Book-cash book having an additional column for banking transactions.

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Why is a Cheque dishonored? How do you record it in the cash book?

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Learning Pundits Content Team

Written on Jun 25, 2019 2:27:35 PM

When a Cheque is presented for payment, there are two possibilities. It may be paid or the payment may be refused. When the payment of a Cheque is refused it is Said to be dishonored. The bank refuses the payment for the following reasons:

1.When no date is written on the Cheque, or a future date is written, or it is more than six months old.

2.If the amount written in words differs from the amount written in figures.

3.When the Cheque is not signed or when the signature on the Cheque does not

4.Tally with the specimen signature with the bank.

5.When the drawer does not have sufficient balance in his account.

6.When the drawer requests the bank in writing to stop payment on that Cheque.

7.If the bank has come to know about the death of the drawer or his becoming insolvent or insane.