Additional Draft Events

These additional events can occur in the draft life cycle at various points:

• Dishonoring a draft.

• Voiding a draft.

• Canceling a remittance.

Dishonor Draft

You dishonor a draft at any point in the draft life cycle after you approve it. After you dishonor the draft, you decide what action to take on the draft. When you dishonor a draft, the system changes the draft status to D (dishonored). The system debits the dishonored draft receivable account and credits the appropriate account. The account that the system credits is based on the system function associated with the business event that occurred before you dishonored the draft.

Void

You void a draft at any point in the draft life cycle after you approve the draft until you reconcile the draft on a bank statement. When you void a draft, the system reopens all the items associated with the draft. This process changes the draft status to E (Void).

Cancel Remittance

You cancel a remittance after you remit a nondiscounted draft either before or after the due date but before you reconcile the draft on a bank statement. For discounted drafts, you must cancel the remittance before the discount date or after you dishonor it. Canceling a remittance returns the draft to the state it was in after you approved and posted it. The system changes the draft's status to A (Accepted). You can remit the draft again at a later date.

Accounting Entries for Draft Voids and Cancel Remittances

When you void a draft or cancel a remittance, the system looks at the last activity that occurred to determine what accounting entries to create. It creates accounting entries that net the activities that have occurred. For example, if you are voiding a non-discounted draft after the due date, the system credits Cash and debits Accounts Receivable to net the following entries:

Event	Debit	Credit
Approve Draft	Draft Receivable	Accounts Receivable
Remit to Bank	Draft Cash Control	Draft Receivable
Draft Due Date	Cash	Draft Cash Control