If a bank statement included an NSF cheque for $450, the journal entry to record this reconciling item would include a:

Question

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An NSF (Non-Sufficient Funds) cheque is a cheque that cannot be processed because the account on which it was drawn does not have enough funds. When a bank returns an NSF cheque, the company must reverse the earlier increase in its cash account. Therefore, the correct journal entry includes a credit to Cash for $450, to decrease the cash balance.

If a Bank Statement Included an NSF Cheque for $450