What To Do If A Cheque Is Dishonoured?

What are the causes of Dishonoured Cheque?

Cheques are dishonoured by the bank if there are insufficient funds, a signature mismatch, overwriting or a stale date..

Can a Dishonoured Cheque be presented again?

Answer: Yes, you can present the cheque again in the bank for payment, even if it was dishonoured on the first occasion. However, it goes without saying that the cheque can be presented again in the bank only during the period of its validity. Normally, the period of validity of the cheque is 3 months.

How is Dishonoured Cheque treated in bank reconciliation?

The bank will usually credit the account when you pay in the cheque. They then send the cheque to the other bank and if the cheque is returned to them as dishonoured, then they will debit the account to cancel it.

What is the journal entry for Dishonoured Cheque?

Payee A/c Dr. Bank A/c Dr. 1 when payments received by him( payee) by cheque.. Cash A/c Dr.

What is the difference between Dishonoured Cheque and bounced Cheque?

The concept of cheque dishonoured & cheque bounce is nearly the same but there has only one difference is that cheque dishonoured due to irregular sign, wrong date etc, but cheque bounce occurred only due to insufficient funds. However, cases of cheque bounce are common these days sometimes cheques remain unpaid.

What is the maximum punishment for Cheque Dishonour?

Legal action According to Section 138 of the Act, the dishonour of cheque is a criminal offence and is punishable by imprisonment up to two years or with monetary penalty or with both. If payee decides to proceed legally, then the drawer should be given a chance of repaying the cheque amount immediately.