On 11/7/2021 10:36 AM, Stan Brown wrote:
On 2021-11-07 07:11, Sharon Sydnor wrote:
I am only experienced in basic bookkeeping but irrespective of what type of
payment you intend to make, you have bought something you intend to pay for
later hence IT IS a LIABILITY -so your second account WILL NOT be a
checking/payment account.
I would agree if the purchase was put on account ("charged"). But when I
write a check, I have paid for the purchase. That the check is postdated
is immaterial: legally I am obliged to have funds in my account and
maintain them there till the check is paid.
If we are being technical, the legal date is when we have made
"constructive delivery" (mailed the check off). But more usual to use
the date written under the assumption that this is known and the
intention is that they will be mailed right out.
That there will almost always be a delay before the checks return to our
bank is why at the end of a statement period we reconciled our checking
account against the bank statement after adjusted for all checks
outstanding. In other words, we expect the account in our books and on
the bank statement will not agree because thew bank doesn't know about
checks we have written but that they have not gotten back yet.
And spot on about the legality. It is not strictly legal to take
advantage of "float". At least not here. Not unless you have an
arrangement with the bank allowing overdrafts. If you do have an
overdraft arrangement, then would be legal to use float up to that limit.
Michael D Novack
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