Jasper Company accepted a check from Harp Company as payment for services rendered. Jasper's bank statement revealed that the Harp check was an NSF check. What effect will the entry to record the NSF check have on the accounting equation of Jasper Company?
A) Option A
B) Option B
C) Option C
D) Option D

Question

Jasper Company accepted a check from Harp Company as payment for services rendered. Jasper's bank statement revealed that the Harp check was an NSF check. What effect will the entry to record the NSF check have on the accounting equation of Jasper Company? 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Quizplus · Accepted Answer

The adjusting entry will increase one asset (accounts receivable) and decrease another asset (cash).

Jasper Company Accepted a Check from Harp Company as Payment