Ignoring GST, the accounting entry that would need to be made for a debtor's cheque for $3400 that has been dishonoured is which of the following?

Question

Quizplus · Accepted Answer

The dishonoured cheque represents a decrease in the amount owed by the debtor, therefore the entry should be a debit to the debtor's account and a credit to the bank account. Option A would increase the amount owed by the debtor, which is incorrect. Option C would imply that the debtor owes a creditor, which is not the case. Option D is not relevant in this scenario.

Ignoring GST, the Accounting Entry That Would Need to Be