Hi , I'm kirti sharma and my question is that "what will be the journal entry for the post dated cheques ??" in the books of accounts of the giver as well as the receiver. Thank you.

Kirti Beta, it is a normal practice in the Indian sub continent to give post dated cheques but in the Middle East, especially the Kingdom of Saudi Arabia, you can deposit the cheque into your bank account before the date of the cheque. It will be honored when presented if there are funds in the drawer's account. If the drawer's account does not have sufficient funds then the drawer faces charges for fraud.

Normally, we do not record the entry when we receive a post dated cheque. It is recorded in the cash book when it is deposited in the bank on the due date. In such cases, there is a likelihood of forgetting the post dated cheque from depositing on due dates since no record is maintained for a post dated cheque when received.

In order to avoid such an instance, it better to record in the cash book when the cheque is received and no entry is made when it is deposited. When a bank reconciliation statement is prepared, the post dated cheque will appear in the reconciliation statement as uncleared item.

There have been instances where a post dated cheque is received and just a day before its due date, the drawer will usually call you to request not to deposit the cheque as there are shortage of funds with the drawer. These tactics are adopted just to avoid or delay the payment.

I do not know about the practice in your country, but in Pakistan if a cheque is returned unpaid by the bank, the drawer can be jailed for three months and the court makes sure that the payment is made promptly.

We are using the following two ledgers
1. PDC Received (or Notes Receivable)
2. PDC Issued (or Notes Payable)

And when you receive a PD chq from a customer, the following entry should be made
Debit PDC-Received
Credit Customer

And another entry on the cheque date (or the date on which you deposit in the bank)
Credit PDC-Received
Debit Bank A/c

If you have any queries, drop me a line at mailtodasATgmailDOMcom