Bank subaccounts

[Former Member]

Dear Sir,

Can anyone explain to me the below mentioned paragraph with an example?

Depending on the user's requirement the bank sub account can either be a cash account or a clearing account. If you use a clearing account in conjunction with the cashed checks program, this clearing program debits the sub account and credits the cash account once the check clears the bank.

Thanks

[former_member198650 · Accepted solution]

Hi Niranjan,

Here cash account means bank account. When you issue or receive checks then the system initially post to bank sub accounts i.e.clearing accounts. When you do bank reconciliation, then the above sub accounts got cleared with bank maintain account. I have explained below how it happens.

Issue Check to vendor:

Vendor A/c Dr

Bank outgoing clearing A/c Cr

Receive check from customer as incoming payment:

Bank incoming clearing A/c Dr

Customer A/c Cr

When you post bank reconciliation:

Bank Outgoing clearing A/c Dr

Bank main account A/c Cr

Bank Main account A/c Dr

Bank Incoming clearing A/c Cr

Regards,

Mukthar

[Former Member · Accepted solution]

thank you sir

[Former Member · Accepted solution]

Dear sir,

I'm not able to find how to close the discussion please help me

thanks

[Former Member]

Hi Niranjan,

Lets assume the business scenario where we issue/receives a cheque from our business partners. Now there may be a possibility that date of issue/receive differs from date of original cash received in our bank. Here bank sub account comes into the picture.

Example- We issues a cheque of rs 1 lakhs to our vendor, now we need to book it in our books at today's date as we have issued it today (01.04.2015).

Our accounting entry on 01.04.2015 would be

Vendor a/c dr    1lakhs

To bank sub account cr    1 lakhs

Whenever our vendor will present this cheque to bank and it will get cleared. Lets assume it is cleared on 07.04.2015

We will pass an entry

Bank sub a/c dr 1 lakhs

To Main bank a/c cr 1 lakhs

This sub account is created similar to main bank account. Additionally these sub accounts (Payment and Receipt) always managed on line item display and open item management. Thus we open item can be managed and cleared according to above example.

This will help us to track when we have issued the cheque and when it was cleared. This will allow us to analyze properly on our cash part.

Thanks and regards,

Anurag

[Former Member]

thank you sir