What are dishonoured cheques?

A dishonoured cheque is a cheque, which when

presented, is refused payment by the bank because
of insufficient funds or because it is not in order.

What are the reasons for dishonoured cheques?

Cheques may contain errors (e.g. signature
missing, amounts differ, etc)
The drawer’s account may be closed.
The drawer may not have sufficient funds in his
account
What is a bank overdraft?
Bank overdraft refers to money owing to the bank
when the business has overdrawn on the money it
has with the bank. It is shown in the Balance Sheet
as a Current Liability.
What is a Bank Loan?
Bank Loans are money owing to the bank and is to
be repaid over several years. It is shown in the
Balance Sheet as a Long-Term Liability.

What are some frauds involving cheques?

Altering the number of the dollar amount
printed on cheques payable to a person.
Putting the fraudster’s name as the payee on
cheques intended for other parties.

What is a bank reconciliation statement?

A bank reconciliation statement is prepared to
account for the difference between the balance in
the Cash Book and the balance in the Bank
Statement.

Why is there a difference between the Cash Book

balance and the Bank Statement balance?
A difference in the timing of recording certain
t ti di i b t th
transactions can cause discrepancies between the
Cash Book and the Bank Statement.
What are unpresented cheques?
Unpresented cheques are cheques issued by the
business to make payments but which are not yet
recorded in the Bank Statement.

What are uncredited cheques?

Uncredited cheques are cheques received by the
business that are recorded in the Cash Book but are
not recorded in the Bank Statement.

What are Credit Transfers?

Credit transfers are proceeds received by the bank
on behalf of its account holder.

What are Standing Orders?

Standing Orders are instructions to the bank to make
regular payments of fixed amounts by a given date.

What are Direct Debits?

Direct debits are payments made directly by the
bank on behalf of the account holder. The amounts
are not fixed. E.g. are GIRO payments such as
electricity and water bills.