Which of the following would be included in the journal to record an NSF check?
A) a debit to Accounts Payable and a credit to Cash
B) a debit to Accounts Receivable and a credit to Cash
C) a debit to Cash and a credit to Accounts Receivable
D) a debit to Bank Expense and a credit to Cash

Question

Quizplus · Accepted Answer

An NSF (Non-Sufficient Funds) check is a check that cannot be processed because the account it is drawn on does not have enough funds. When a business receives an NSF check, it must reverse the initial entry of receiving cash. Therefore, the business debits Accounts Receivable to increase it (since the expected cash was not received and the customer still owes the money) and credits Cash to decrease it (to reflect the reduction in cash due to the NSF check).

Which of the Following Would Be Included in the Journal