If a check marked NSF is returned from the bank,an adjusting entry crediting cash is needed.

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When a check marked NSF (non-sufficient funds) is returned from the bank, it means there isn't enough money in the account to cover the payment. As a result, the original payment is voided, and an adjusting entry is made to subtract the payment amount from the cash account. This is why a credit to cash is needed in the adjusting entry.

If a Check Marked NSF Is Returned from the Bank,an