During a bank reconciliation, Bach Inc. discovered a NSF check from their customer, Larry Bobble for $70. The journal entry required to update the cash balance would be:

Question

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Since the check from Larry Bobble was returned as NSF (non-sufficient funds), it means that the bank did not honor the check and the amount should be deducted from the cash balance. Therefore, we need to debit the customer's account, Accounts Receivable - L. Bobble, to reduce his outstanding balance, and credit the Cash account to adjust the balance for the amount of the NSF check. Option A and B are incorrect because they do not account for the fact that the check was returned as NSF. Option D is incorrect because a journal entry is required to adjust the Cash account for the NSF check.

During a Bank Reconciliation, Bach Inc