ENTRY NO. 11 – ALTERNATE ENTRY FOR DISHONORED CHECKS - 10511

(Revised: 12/2021)

Purpose: Alternate method to record payment of dishonored checks.

 

Cash is disbursed from the agency/department’s General Cash account to reimburse banks for dishonored checks. This alternate entry is to be used by agencies/departments that desire to charge dishonored checks previously credited. It directly adjusts the accounts affected by dishonored check transactions. When the dishonored check is redeposited or a replacement check is received:

• Increase the cash and Abatement, Reimbursements, Revenue, and Due to Other Funds/Appropriations and
• Decrease the receivable and provision accounts

At year-end, accrue the amount of dishonored checks expected to be collected in the next fiscal year. See Adjusting Entry No. A-9 for a similar accounting entry.

 

References: SAM sections 8043, 8043.1, 10410, and 10417

 

Record Payment for Buy-Back of Dishonored Check

Debit/ Credit	Account	Legacy Account	Account Description	Note
Debit	1200150	1315	Accounts Receivable-Dishonored Checks	a
Credit	1101000	1110	General Cash	a

 

AND

Debit/ Credit	Account	Legacy Account	Account Description	Note
Debit	2010000	3114	Due to Other Funds-Current	b
Debit	2011000	3115	Due to Other Appropriations Within Same Fund-Current	b
Debit	4xxxxxx	8000	Revenue	c
Debit	481xxxx	8100	Reimbursements	d
Debit	5xxxxxx	9000	Appropriation Expenditures	e
Credit	1290000	1600	Provision for Deferred Receivables	f

 

Note:

1. Total amount of dishonored checks purchased.
2. Amount of dishonored checks previously accounted as revenue collected Due to Other Funds/Appropriations.
3. Amount of dishonored checks previously accounted as revenue.
4. Amount of dishonored checks applicable to reimbursements that are not to be accounted as reimbursements until collected or until ordered into the State Treasury.
5. Amount of dishonored checks previously accounted as abatement.
6. Amount of dishonored checks that will not be credited to income accounts until collected and the receivables must be fully reserved.