On 9/19/2019 10:35 AM, orn...@tutanota.com wrote:
Let me expand a little. This is for personal use, such as the purchase of artwork or a
service, so its purpose is not for a business. Recent examples were for repair of a
vintage fountain pen or a wrist watch. The repairers asked for a bank check, so I wrote a
check to the bank for cash, the bank then gave me a "bank check," which I sent
to the repairer.
What are the mechanics of double entry debits and credits? If I write the check
to the bank do I then have to show income to bring it back in?
a) If this is frequent, I would probably create an account for
"negotiable instruments" (or just "bank checks" if that's the only type
dealt with). Your purchase of one is just an asset transfer transaction.
When and if used to pay an expense* that transaction would be debit
expense and credit this asset. The reason I put the asterisk is often
the bank check is needed to purchase an expensive asset (car, house, art
work, etc.) so the debit side would be for some fixed asset,not an expense.
b) If you are bringing it back in (never used) that would not be income
but again an asset transfer transaction. That is actually a fairly
frequent use of a bank check, needed if taking part in an auction in
case you are high bidder but otherwise returned to the bank.
Michael D Novack
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