When preparing a bank reconciliation for the purpose of arriving at a correct cash balance, NSF (not sufficient funds) checks are subtracted from the balance per books.

Question

Quizplus · Accepted Answer

NSF checks are subtracted from the balance per books because they represent amounts that were previously recorded as deposits but have been returned by the bank due to the payer's lack of funds, thus reducing the actual available balance.

When Preparing a Bank Reconciliation for the Purpose of Arriving