Posted: June 30 2008 at 10:45am | IP Logged

Post dated check should not be cashed before that date (legally)

Below lines are from law dictionary. I included the website link below.

postdated check
n. a check delivered now with a written date in the future, so that it cannot be cashed until that date. The danger to the recipient is that such a check is legally only a promissory note due at the later date, and if the account is closed or short when the check is presented at the bank, the payee has no rights to demand payment by the bank or claim that the delivery of a bad check was criminal.

source:

http://dictionary.law.com/default2.asp?selected=1560&bol d=%7C%7C%7C%7C

Posted: June 30 2008 at 12:51pm | IP Logged

As the Balance sheet prepared using the concept designed under the GAAP. The management prepared Financial statements using those concept, which are also called financial statement assertions, and auditors verify them and issue a report that company's F/S are showing true and fair view as at the balance sheet date. Since post dated check received before the balance sheet date does not give a legal right (one of the financial statement assertions) to the entity to encash the check before its due date unless discounted.

Hope it will help.

Thanks,