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> I didn't cash it, as it seemed like LJ needed the money. I don't think this is particularly useful. For professional accounting purposes, uncashed outgoing c
by Hello71 6y ago
> I didn't cash it, as it seemed like LJ needed the money.
I don't think this is particularly useful. For professional accounting purposes, uncashed outgoing checks are liabilities, meaning that in general, the company cannot spend that money to do other things. If you want them to keep the money, you need to tell them that. Otherwise, the money effectively gets split between the bank and the government.
- ska 6y agoI think this is more generally true - the existence of the check has no bearing on the liability; it's only when you cash it that liability is resolved (i.e. it's the bank transaction that resolves things, not the check)
- pdonis 6y ago> For professional accounting purposes, uncashed outgoing checks are liabilities Even accounts payable that haven't had checks written against them yet are liabilities. Which makes your advice that you need to tell them if you want them to keep the money even more important.
- ericbarrett 6y agoImportant to know that in many US jurisdictions, uncashed checks eventually "escheat" to the state as unclaimed property. (I was unaware of this until looking up accounting procedures for uncashed checks.)
- brantonb 6y agoThis was an excellent Planet Money episode about how a guy bought AMZN stock to hold but it got escheated because he didn’t log into his brokerage account. Needless to say, what should’ve been a small fortune… wasn’t. https://www.npr.org/2020/01/24/799345159/episode-967-escheat-show https://www.npr.org/2020/01/24/799345159/episode-967-escheat...