CNA Reports - Account Audit: uses Paid Bill in the Cash Account (pseudo checks)

What does 'Paid Bill' mean on an Account Audit Report?

The words Paid Bill on an Account Audit Report for the Cash Account indicate a pseudo check was written.

What is a Pseudo Check?

Pseudo checks are common practice when first starting to use the accounting software. They are used to record checks written from your prior Accounting Software which has not yet been reconciled. Pseudo checks allow you to record these checks in Accounting without affecting your Cash Account so you may later mark them when shown as cleared on your Bank Statement. A pseudo check is created as follows: A bill is created with the Cash Account as the line item where the expense would normally go. When the check number is created (through printing a check or assigning a check number), the resulting entry is a Credit to Cash and a Debit to Cash: a wash. After that initial entry of pseudo checks to record checks from your prior accounting software, pseudo checks are generally not advised.

Periodically, a Pseudo check is created accidentally when the cash account is used as the line item where an expense account is required. This will show up in your system in several ways: When marking a pseudo check on the Bank Reconciliation, the reconciliation will not balance because it both debits and credits the same Cash Account; when running a check register report, the right column which lists the expense accounts will show the cash account as the line item for this check; the Account Audit report for the Cash Account will show Paid Bill in the first column. 

How do I fix a bill/check which was entered as a Pseudo Check when it should not have been?

To fix the issue (do NOT void the check), you will unmark the Check on the Bank Reconciliation (if you have already marked it) and submit. Then...

If the bill was dated in the current open accounting period:

If you have a delete button (depending on your user privileges), delete the check, update the bill, and use the Assign Check Number button in the bill to re-add the check number. If you do not have the delete button, you must contact someone in your organization who does have this privilege such as a church administrator or a diocese's administrator and ask them to delete the check. 

Or- create a journal entry which Credits the cash account and Debits the Expense Account which should have been used in the first place. When the check is cleared on the Bank Statement, mark both the Psuedo Check and the Journal Entry.

If the  bill was dated prior to the current open accounting period:

If you cannot update the bill because it was created in a different accounting period:

  • if you are part of a diocese, you must contact your diocese and ask them to open the period in which the bill was written.
  • If you are not part of a diocese, you must email support and ask them to open the period in which the bill was written. 
  • Once the period is open, follow the steps outlined above.


Related Articles

How voiding a psuedo check affects my bank reconciliation

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