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Bookkeeping › Cash Book & Petty Cash

How do you record dishonoured (bounced) cheques in the cash book?

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Answer

When a customer's cheque previously recorded as received is dishonoured by the bank, reverse the receipt: credit the bank column of the cash book (money not actually received) and debit the customer's account in the sales ledger to reinstate the debt. Any bank charge for the dishonour is also recorded as a payment/expense.
Customer cheque 500 bounces:
  Cr Bank (cash book) 500
  Dr Debtor (customer) 500  -- reinstate the receivable
Real-world example A bounced customer cheque is credited out of the bank column and the receivable is reinstated for collection.

Common follow-ups: Which account is debited when a cheque bounces? | How is the bank charge handled?

Bank Reconciliation Sales & Purchase Ledgers Cash Book & Petty Cash
All 26 Cash Book & Petty Cash questions