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arkvalleyinfo
October 16, 2018
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How do I make a journal entry for uncleared checks?

  • October 16, 2018
  • 6 replies
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There are a couple of checks to venders that were never cashed. How do I journal entry them out at year end?

Best answer by lynda11_2

No journal entry necessary. Just click + bank deposit and create deposits using the same expense acct. as the check.  clear both when you reconcile. 

6 replies

lynda11_2
lynda11_2Answer
October 16, 2018

No journal entry necessary. Just click + bank deposit and create deposits using the same expense acct. as the check.  clear both when you reconcile. 

    A
    AnneSo
    January 23, 2020

    I have done this previously but this time it is not clearing the balance when I reconcile and I do not know why

    A
    AnneSo
    January 23, 2020

    I have entered a deposit to offset a check that has not cleared from the previous year, when I reconcile these are not clearing. I have done this before and it has been successful , I do not know why it is not working this time, I have not double entered any of these.

    Thanks

    qbteachmt
    qbteachmt
    October 16, 2018

    You don't Offset them for year end.

    You only offset them because you want to Declare them as Dead or Lost.

    It is not unusual at any month end or year end to have Checks that didn't make the statement cutoff date. You let them ride; typically, for checks, they are declared "stale and not able to be cashed" at about 6 months old. For Deposits it is more timely; a few days at most, such as over a three-day holiday weekend.

    If you are going to declare them Stale and replace them, post the Deposit to an other liability account and then pay out that liability. You don't want to reduce the expense and then incur it again, for a Banking replacement issue.

      D
      DecaturInvestor
      January 24, 2019

      I have a similar situation, but it's was for WIP. I recorded the check when it was sent via billpay. After 30 days bank notified that they deposited back into my account and we determined it went to the wrong address. So we sent another check. 

      The returned amount was deposited into checking, however, there are still two additions to the WIP, but no credit for the uncashed check, so it's throwing off the WIP.  What kind of journal entry can I perform to get the uncashed check  into WIP? 

      @qbteachmt wrote:

      You don't Offset them for year end.

      You only offset them because you want to Declare them as Dead or Lost.

      It is not unusual at any month end or year end to have Checks that didn't make the statement cutoff date. You let them ride; typically, for checks, they are declared "stale and not able to be cashed" at about 6 months old. For Deposits it is more timely; a few days at most, such as over a three-day holiday weekend.

      If you are going to declare them Stale and replace them, post the Deposit to an other liability account and then pay out that liability. You don't want to reduce the expense and then incur it again, for a Banking replacement issue.


       

      qbteachmt
      qbteachmt
      January 24, 2019

      @DecaturInvestor

       

      None of the Banking mess is supposed to be in WIP at all. Let's take it a step at a time:

      "The returned amount was deposited into checking"

       

      Which means you enter a "placeholder" Deposit as "other current liability" = Not my funds to keep; not related to any Business activity. Just a Banking error "to be resolved later."

       

      Then, you pay out the Liability on the replacement check. None of this is WIP. It would only hit WIP is the check comes back, you won't replace it, so you didn't have to pay for the goods or services after all, such as a Disputed charge you paid, then got your own check returned as settlement of that dispute with your vendor.

       

      Never use JE for this. Never use JE for anything for Banking or where names are involved. That's another reason this isn't WIP; it isn't More Money to include for purposes of 1099-Misc reporting.

       

      It's just a Banking error; don't make it worse.

        A
        AnneSo
        January 23, 2020

        I offset the uncashed checks with a deposit but when I reconcile it does not clear them and I have not entered them twice

        I have done this before and it has worked, I do not know what to do now.

        JenoP
        JenoP
        January 23, 2020

        I'll help clear out the check, AnneSo.

         

        Both transactions will not be shown in your actual bank statement since they were not actually taken out of the actual account. This can be the reason why you're unable to clear them out in the Reconciliation page. 

         

        You'll want to manually change their status to Cleared in the bank register. Here's how:

         

        1. Open your Chart of Accounts.
        2. Under the Action column of the bank account, select View register.
        3. Look for the uncashed check. 
        4. Double-click on the space under the Reconcile Status (✓) column until C (for Cleared) appears.
        5. Click Save repeat the same process for the deposit.

        Check out these reconciliation-related articles for additional guide and reference:

         

        I'd be glad to get back here and offer my help if you have follow-up questions.

        C
        chaga
        March 9, 2021

        I have 2 payroll checks from 2018 that were never cashed and the employee is no longer employed.  They were only for $1.10 and $1.63.  How do I clear them out of my bank reconciliation?  What kind of entry do i need to create?

        katherinejoyceO
        katherinejoyceO
        March 9, 2021

        Thanks for joining this conversation, @chaga. You can make a journal entry for those 2 payroll checks that were never cashed. This is to clean the old uncleared items out of your outstanding checks lists.

         

        Here's how:

         

        1. Go to the + New button, then select Journal entry. 
        2. Enter the necessary information in the field to create a journal entry. 
        3. Click Save and close.

         

        I'd also suggest you consult an accountant before taking this option to ensure the accuracy of your books. 

         

        For future reference, I'd recommend reading through these resources to learn more details about fixing reconciliation discrepancies:

         

         

        Feel free to post again should you have any additional concerns. We're always here to listen and help in any way we can. 

        E
        Eagle Fabricators
        July 3, 2023

        Hello,

         

        We closed one of our bank accounts and we have two checks that are from 2022 that need to be cleared out, so I can zero out the bank account in QB.

        Help! Thanks!

        D
        dolly riley
        October 17, 2023

        For past unreconciled transactions (after tax returns are filed) - what is the simply way to remove the transaction.  Is it proper to move clearing the transaction using retained earnings?

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