A dishonored cheque is

A dishonored cheque is a check that cannot be processed because the account holder who wrote the check did not have enough funds or their account has been closed. When a cheque is dishonored by the bank, it is considered as an unpaid cheque. In accounting, the dishonored cheque is debited in the cash book and credited in the bank book to show that the amount of the check cannot be withdrawn or deposited. This entry is necessary to update the accounting records of the business and to ensure that the cash book balance and bank book balance are in agreement.