Which journal entry indicates a company has been notified by its bank that a customer's check has been returned marked nsf?

a. debit accounts receivable; credit accounts payable

b. debit bank service charge; credit cash

c. debit cash; credit accounts receivable

d. debit accounts receivable; credit cash?

Question

Business

Yadira Sutton

10 March, 00:15

Which journal entry indicates a company has been notified by its bank that a customer's check has been returned marked nsf?

a. debit accounts receivable; credit accounts payable

b. debit bank service charge; credit cash

c. debit cash; credit accounts receivable

d. debit accounts receivable; credit cash?

+2

Answers (1)

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Sean Roach · Answer 1

D. Debit accounts receivable; credit cash.

NSF means "not-sufficient funds." When a customer's check has been marked as NSF, then we must adjust the accounts receivable and cash accounts in the journal entry to acknowledge that we must increase our accounts receivables and decrease our cash. We would debit accounts receivables and credit cash to account for this adjustment.