Dishonoured cheque (R/D - refer to drawer)

A cheque that is not paid when presented to the drawer’s (the person who write & issues a cheque) bank

Why?

• Insufficient funds
• Changes on the cheque - smudges/writing over numbers making new number not clear
• Incomplete cheque - not all details filled
• The cheque is post-dated - date on the cheque refers to a later date, e.g. writing a cheque today with a date for 1 Aug 2020 and then  depositing the cheque next week.
• drawer’s account is closed
• Signature not the same as the one the bank has

NOTE: It is always a good idea to thoroughly check the details on a cheque before depositing it.

What to do with an R/D cheque?

• When receiving a cheque from a debtor - record it in the CRJ and post to the Debtors Ledger where the Debtor’s account would decrease (credit).

For example 1

Received  a cheque for R200 from O. Crevet as part payment of his account

Hoisen Stores

Cash Receipts Journal - March 20.1 CRJ1

Debtors Ledger of Hoisen Stores

O. Crevet

• After the check has been deposited and returned marked R/D. We had originally written the received cheque in the CRJ. Now we must write/reverse it in the CPJ. Post to the Debtors Ledger where the debtor’s account would increase (debit)

For example 2

The bank returned O. Crevet’s cheque which was received on the 20th marked ‘r/d - insufficient funds’.

Hoisen Stores

Cash Payments Journal - March 20.1 CPJ

Debtors Ledger of Hoisen Stores

O. Crevet

Do 

Task 4.12 p.113

Task 4.13 p.120

Task 4.14 p.122

Task 4.15 p.122

Task 4.16 p.126