Following the February bank reconciliation, the accountant made the following entry in the journal of King Company: This journal entry may have been used to record:
A)bank charges owed by King to the bank.
B)the collection of an account receivable by King that is part of a deposit in transit.
C)an NSF check received by King from a customer.
D)the collection of an account receivable by the bank that has been deposited in King's account.

Question

Following the February bank reconciliation, the accountant made the following entry in the journal of King Company:  This journal entry may have been used to record:
A)bank charges owed by King to the bank. 
B)the collection of an account receivable by King that is part of a deposit in transit. 
C)an NSF check received by King from a customer. 
D)the collection of an account receivable by the bank that has been deposited in King's account.

Quizplus · Accepted Answer

When a company discovers an NSF check, it reduces its cash account (a credit) and increases accounts receivable (a debit) while it attempts to collect on the check.

Following the February Bank Reconciliation, the Accountant Made the Following