Keatts Company's bank statement included an NSF check written by one of its customers. What effect will the entry to recognize the NSF check have on the company's financial statements?

Name: Keatts Company's bank statement included an NSF check written by one of its customers. What effect will the entry to recognize the NSF check have on the company's financial statements?
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Question

Quizplus · Accepted Answer

The entry will increase accounts receivable and decrease cash. It is reported as a cash outflow for operating activities.

Keatts Company's Bank Statement Included an NSF Check Written by One