Cashier's checks are issued by the bank for various payments. Among these are payments to customers of the proceeds of loans and discounts, payments made for the purchase of securities, and for various expenses of the bank. Assume that a bank buys $1,000 worth of office furniture and issues cashier's check No. 903 for it. The entry on the general ledger would be:

Auxiliary Record Of Cashier's Checks

It is customary in the larger banks for the auditor, or for the official who has the auditor's function, to keep a record of the checks issued showing date issued, amount, check number and date paid. The open or unpaid items, of course, must prove with the general ledger. As soon as checks have been redeemed by the bank, the date paid is filled in opposite their amounts on this auxiliary record of the checks issued. The general ledger entry upon payment of the cashier's check is:

Debit: Cashier's Checks Outstanding (39) Credit: Due to Depositors (37) or Credit: Cash (11)