pending vs. completed transactions

[Tommy Trussell]

On Thu, Oct 15, 2009 at 7:41 AM, Mike or Penny Novack
<stepbystepfarm at mtdata.com> wrote:
> Maf. King wrote:
>
>> On Thursday 15 October 2009 04:28:33 T. Howell-Cintron wrote:
>>
>>>
>>> My bank shows my debit transactions as "pending" for up to a week before
>>> they clear, and the date assigned to them on my bank's web site is the
>>> date they cleared.
...

> Should point out here that this is NOT something new in accounting and is
> what "reconciliation" is all about. Let's for the moment forget about modern
> things like credit cards and debit cards and think of old fashioned checks.
...
> 3) Similarly when you make deposits. If you deposited cash or equivalents (a
> cashiers check for example) then immediately available but amounts from
> ordinary checks not necessarily so and possibly never available (that check
> might bounce). But you enter the amounts as of the deposit date and make
> corrections later if necessary.

I don't want to drag the discussion too far off from the original
question, but I have a situation that has affected me numerous times
-- I receive payments from different sources, but the entity that pays
me also reports the payment to others including the government, SO the
day I was "paid" is whatever the check says, even if it says December
31st but I cannot practically deposit it until January 3rd.

SO I have an account called "current assets:checks received" where I
record the date and other information about each check as it comes in,
and then when I make a deposit to the bank, the deposit transaction
draws from the checks received account and transfers each to the bank
account. That way I am covered both ways AND I have a way to track
individual items if they get misplaced between the time I receive them
and the time they hit my bank account.

If I have a check that fell behind the desk for six months, an
accountant may have some extra work to verify the transaction (he or
she will look through the bank statements until the transaction hits
the bank, even if it is in the next fiscal period), but the fact that
my books and the bank's don't show the payment amount anywhere near
the same time doesn't matter in the end because all the parts can be
reconciled. I have added an account that makes it easier to handle.

The original poster COULD create a transitional account, but that
would be a lot more work for little gain. I would look for some sort
of an identifying information on the transactions and use that
whenever possible. On my credit card and debit transactions, the
statements from the bank show the posted date AND the transaction
date. If your bank does not produce a statement that shows both dates,
ask them if they will. If they cannot, try using another bank!