After preparing the bank reconciliation,an NSF check would result in which of the following when recording the adjustment to the company's cash balance?
A)Debit to Service Fee Expense.
B)Credit to Accounts Payable.
C)Credit to Service Revenue.
D)Debit to Accounts Receivable.

Question

Quizplus · Accepted Answer

An NSF check (non-sufficient funds) means that the customer's check bounced due to lack of funds in their account. This means that the payment was not received, and so it needs to be deducted from the company's cash balance. The adjustment required would be a debit to Accounts Receivable, which reduces the balance of the account, reflecting the fact that the payment was not received.

After Preparing the Bank Reconciliation,an NSF Check Would Result in Which