How do you handle the case when a customer's check is returned for non-sufficient funds?
A)Record it in purchases journal
B)Make an entry to record the money owed and an equal decrease in cash
C)Write it off as an uncollectible account
D)All the choices are correct

Question

Quizplus · Accepted Answer

When a customer's check is returned for non-sufficient funds, the correct accounting treatment is to make an entry to record the money owed and an equal decrease in cash. This is because the check has not been honored by the bank, and the company has not received the funds.

How Do You Handle the Case When a Customer's Check