Is there an opposite of Bad Debt?

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
I am writing up the cash book and getting things ready for our accountant, and I have found three cheques written to two different companies that have never been cashed. One of them is now about 18 months old, so I guess it never will be. <BR><BR>If this were the other way round, and we were waiting for payment, there would be bad debt provision. I will be preparing a list of debtors and creditors as usual for the accountant, but I'm not sure how to list these cheques (not an insubstantial amount), as they are not exactly creditors, neither are they debtors. Are they 'creditors written off' or something like that?<BR><BR>I'm sure the answer will be stupidly obvious, but I can't see it.<BR><BR>Can anyone help me?

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Is there an opposite of Bad Debt?

    If the cheques are over 6 months old then they are now out of date and should be reversed, this would then leave a balance on the suppliers account which should be included in creditors.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Is there an opposite of Bad Debt?

    I've never heard of a Bad Credit Written Off account; maybe you could start a trend.<BR><BR>Perhaps the creditor went out of business: any decent liquidator would have found the debts and asked for the money again.<BR><BR>Does the cheque sum still appear on the supplier statements? If your feeling honest you could contact the payee and ask them if they intend to present the cheque but why suffer for their lack of credit control.<BR><BR>My last employer's bank cleared a cheque 6 YEARS after the date on the cheque so I don't think the banks look too closely. <BR><BR>Alexander
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Is there an opposite of Bad Debt?

    Yes, good debts....hehe.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Is there an opposite of Bad Debt?

    Thanks guys :-)<BR><BR>Why would I include them as creditors when the debt has been paid (in theory at least) about this one. As a customer, are we responsible for a suppliers credit control?<BR><BR>Suze
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Is there an opposite of Bad Debt?

    You are not responsible for Suppliers credit control, however you have not paid the debt a cheque is a promise to pay but untill it has cleared the banked you have not paid. If the Suppliers terms state that goods remain their property until paid for, as most good ones should, then the goods dont belong to you as yet.

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