Question:

If a cheque got lost in the post and new one is drawn, do you have to cancel the lost cheque?

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Cheque number 366 was issued to pay a creditor. It was lost in the post and a new cheque, cheque number 372, was issued and again debited to the creditors account. Do you need to cancel cheque number 366 by writing it on the receipts side in the cash book ( cancelled cheque ) and then record cheque number 372 as a payment on the payments side of the cash book?

This matter was picked up during a bank reconciliation.

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  1. Yes, you have to make an adjustment to reverse the exact entry for cheque #366. Once you make the adjustment, it will no longer feature as an outstanding cheque in the bank rec.

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