PRC-1 · Chapter 9 · Question 62 of 100
A time-barred (stale) cheque of Rs. 145,540, previously issued to a supplier 8 months ago, is discovered. How should it be treated?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Reverse the payment by debiting the cash book
Explanation
A stale cheque is no longer valid for payment. The original credit (payment) must be reversed by debiting the cash book. It is no longer treated as an unpresented cheque in the BRS.
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