What is a voided check?

A voided check is a check that has been written on a checking account, but which was subsequently canceled without being cashed. A check is normally voided because there was a mistake on the check, or because it was issued in error (such as a duplicate payment for a supplier invoice). If an employee is giving a voided check to his or her employer, this is usually so that the employer can use the bank number and account information on the check to set up a direct deposit arrangement with the employee.

A voided check may be perforated with a "Void" stamp, or crossed out, or have "Void" written across it, be shredded, or simply be stored in a voided checks file. It is best to permanently deface or destroy a voided check, so that no one can present it to a bank at a later date and expect to be paid for it. If the check is not currently in the company's possession, then contact the bank and authorize a stop payment on the check (for which the bank will charge a fee).

In the accounting system, the check would have been recorded when it was originally created, so a reversing entry must be made that debits (increases) cash and credits (decreases) the account to which the payment applies. Thus, if the payment had been for an expense, the credit would be to the related expense account; if the payment had been to acquire an asset, the credit would be to the related asset account.

If there is a check register, the reversing entry is needed in order to record the elimination of the accounting  transaction associated with the check number that is printed on the check.

In a computerized accounting system, there is usually a menu option for voiding a check.

Related Topics

What is a deposit in transit?
What is a post dated check?
What is a restrictive endorsement?
What is an unpresented check?
What is not sufficient funds?