treatment of cheques written but not yet distributed to supplier

Question

I was wondering about the treatment of the cheques that are written but not yet distributed to suppliers.  

Once the cheques are written (not yet distributed) , the entry being:
Dr.  Expenses
   Cr.  Bank

Is the above entry correct?

Thanks for the help!!

Answer 1

I don't think this is a good practice. If the cheque is not delivered to the supplier,  transaction is not completed & payment is not effected. Therefore it is not right to credit the bank account.

Answer 2

When funds have not been taken from the Bank, there's no need to credit bank.

When you have written cheque out to your suppliers but they have not been cash and it is year end you should recognize an accrual by Dr Expense & Cr Accrued Expense.

reason being that you have incurred an expense but you have not paid for it.

I hope it is clear.