A customer's check for $1,200 was returned for nonsufficient funds.Which of the following journal entries is needed to adjust for the NSF check?
A) $$\begin{array} { | l | l | l | }
\hline \text { Accounts Receivable } & 1,200 & \
\hline \text { Cash } & & 1,200 \
\hline
\end{array}$$
B) $$\begin{array} { | l | l | l | }
\hline \text { Cash } & 1,200 & \
\hline \text { Sales Revenue } & & 1,200 \
\hline
\end{array}$$
C) $$\begin{array} { | l | l | l | }
\hline \text { NSF Check } & 1,200 & \
\hline \text { Cash } & & 1,200 \
\hline
\end{array}$$
D) $\begin{array}{|l|l|l|}
\hline\text { Accounts Payable } & 1,200 & \
\hline \text { Cash } & & 1,200 \
\hline
\end{array}$

Question

A customer's check for $1,200 was returned for nonsufficient funds.Which of the following journal entries is needed to adjust for the NSF check?
A) $$\begin{array} { | l | l | l | } 
\hline \text { Accounts Receivable } & 1,200 & \
\hline \text { Cash } & & 1,200 \
\hline
\end{array}$$
B) $$\begin{array} { | l | l | l | } 
\hline \text { Cash } & 1,200 & \
\hline \text { Sales Revenue } & & 1,200 \
\hline
\end{array}$$
C) $$\begin{array} { | l | l | l | } 
\hline \text { NSF Check } & 1,200 & \
\hline \text { Cash } & & 1,200 \
\hline
\end{array}$$
D) $\begin{array}{|l|l|l|}
\hline\text { Accounts Payable } & 1,200 & \
\hline \text { Cash } & & 1,200 \
\hline
\end{array}$

Quizplus · Accepted Answer

When a check is returned for nonsufficient funds (NSF), the company must reverse the initial recording of the check as cash. This is done by debiting Accounts Receivable to increase it (indicating the customer still owes the money) and crediting Cash to decrease it (removing the amount that was initially recorded as received).

A Customer's Check for $1,200 Was Returned for Nonsufficient Funds Accounts Receivable 1,200 Cash 1,200\begin{array} { | l | l | l | } \hline \text { Accounts Receivable } & 1,200 & \\\hline \text { Cash } & & 1,200 \\\hline\end{array} Accounts Receivable Cash ​1,200​1,200​​

A Customer's Check for $1,200 Was Returned for Nonsufficient Funds $\begin{array} { | l | l | l | } \hline \text { Accounts Receivable } & 1,200 & \\\hline \text { Cash } & & 1,200 \\\hline\end{array}$