Period of maintaining check by payee to withdraw it from bank is varied within one month or two months per some country’s regulations and three months or six months per other country’s regulations. And it may be unlimited period in some countries. Therefore, any check that has not been withdrawn might need to be reversed in accounting records.
Cash/Check Receiving Note is strong legal documentary evidence which proves that payee received the check or cash. But some payees have not cash/check receiving note, Check is legal documentary evidence prove that payee receives the money as long as the money withdrawn from the bank, but for more secured procedures. Company should obtain copy of the payee’s official ID and ask the payee to sign on the copy of the check that he/she received the original check. For cash payments, payee who could not issue cash receipt note for payer, he/she should write his/her name by himself/herself and sign near his name and fingerprint is required if the payee is illiterate.
For Company that are filed against bankruptcy, the first assets that are frozen is the cash maintained on hand or in banks. The liquidation value of cash is not changed because it is cash except if the cash is in foreign currency it is evaluated based on the current/market exchange rate that is prevailed at the date of liquidation.
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