Your uncle has just started a business and comes to you with a question. "I'm confused. I have a memo included with my bank statement indicating a $45 service charge for printing new checks. Since you're an accounting major, maybe you can explain to me why they call it a 'debit memorandum,' even though they are deducting this amount from my account. When I took Accounting in school, I could have sworn that a decrease in the Cash account would be a credit and not a debit.
REQUIRED:
In a short paragraph, explain this issue to your uncle.

Question

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The Answer of Your uncle has just started a business and comes to you with a question. "I'm confused. I have a memo included with my bank statement indicating a $45 service charge for printing new checks. Since you're an accounting major, maybe you can explain to me why they call it a 'debit memorandum,' even though they are deducting this amount from my account. When I took Accounting in school, I could have sworn that a decrease in the Cash account would be a credit and not a debit.
REQUIRED:
In a short paragraph, explain this issue to your uncle.

Your Uncle Has Just Started a Business and Comes to You