PDC Liquidation

PDC liquidation is a term used in some accounting systems for settling a post-dated cheque record when the cheque is collected or paid through the bank.

For a received cheque, liquidation generally records confirmed collection and clears the relevant PDC receivable or clearing balance. For an issued cheque, it generally records the bank payment and clears the relevant PDC payable or clearing balance. The entries depend on how the cheque was originally recorded and on the system configuration. Reaching the cheque date or depositing it does not, by itself, confirm settlement. Here, liquidation means cheque settlement, not company liquidation or early cheque financing.

Used when matching bank-confirmed cheque collections and payments to the PDC register and closing settled cheque records.

A received cheque of AED 10,000 was recorded in a PDC receivable account. When the bank confirms collection, the illustrative settlement entry is: debit Bank AED 10,000; credit PDC Receivable AED 10,000. If an issued cheque was recorded as PDC payable, its payment may be settled by debiting PDC Payable and crediting Bank.

Keeps the cheque register aligned with actual bank movements and prevents settled cheques from remaining open or being recorded twice.