A postdated check—a check with a date that is later than the current date—is not considered to be currency. Further, the postdated check should not be reported as part of the Cash account balance until the date of the check.
If the postdated check was received as payment on accounts receivable, the accounts receivable balance is not reduced until the date of the check.
To illustrate this, let’s assume that on August 20 a company receives a $1,000 postdated check. The check is dated September 5 and represents the full payment on one of the company’s accounts receivable. Since the postdated check is not considered to be money until the date of the check, the accounts receivable should not be reduced and cash should not be increased until September 5. Therefore, the company’s August 31 balance sheet will report that the customer’s $1,000 accounts receivable is still due.
