Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is required in the company's accounts?
A) debit Notes Receivable; credit Cash
B) debit Cash; credit Miscellaneous Income
C) debit Cash; credit Notes Receivable
D) debit Accounts Receivable; credit Cash

Question

Quizplus · Accepted Answer

The bank collected a note on behalf of the company, increasing the company's cash balance and decreasing the notes receivable. Therefore, the correct entry is to debit Cash and credit Notes Receivable.

Accompanying the Bank Statement Was a Credit Memo for a Short-Term