Should the checks I write be logged via my Accounts Payable account, or just directly from my Bank Asset account to my Expenses account?
I see issues with both methods:
- Bank Asset => Expenses
- An entry in my Bank Asset account shows a withdrawal of cash from my bank checking account on the date I wrote the check.
- However, my bank checking account does not match my personal ledger until the check is actually cashed (which may not occur for many days).
- Accounts Payable => Expenses
- An entry in my Accounts Payable account indicates the check is written for the respective Expenses; a subsequent entry in my Bank Asset account is made several days later to reflect when the check is actually cashed.
- However, use of the Accounts Payable account implies that I have not yet paid for the expenses (which is not really true since I did write the check).
What method should I use to account for written checks? I want to show that I have indeed given the check as payment to the other party, but that the cash in my bank checking account has not been drawn yet.