Following is a bank reconciliation for Zocar Enterprises for June 30, 2018.

Cash Account Bank Statement Balance as of 6/30/2018 $1,918 $3,000

Deposit in transit 600

Outstanding checks (1,507)

Note collected by bank 2,000

Bank service charge (25)

NSF check (1,800)

Adjusted cash balance as of 6/30/2018 $2,093 $2,093

As part of the normal process for handling an NSF check, the accounting clerk has notified the customer that their account did not contain sufficient funds to pay the balance owed to the company. The customer was told that they will need to provide an alternative form of payment to cover the outstanding balance.

Prepare the adjusting entry that the clerk would have made to record the NSF check. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Question

Business

Lane Luna

16 August, 01:56

Following is a bank reconciliation for Zocar Enterprises for June 30, 2018.

Cash Account Bank Statement Balance as of 6/30/2018 $1,918 $3,000

Deposit in transit 600

Outstanding checks (1,507)

Note collected by bank 2,000

Bank service charge (25)

NSF check (1,800)

Adjusted cash balance as of 6/30/2018 $2,093 $2,093

As part of the normal process for handling an NSF check, the accounting clerk has notified the customer that their account did not contain sufficient funds to pay the balance owed to the company. The customer was told that they will need to provide an alternative form of payment to cover the outstanding balance.

Prepare the adjusting entry that the clerk would have made to record the NSF check. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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Answers (1)

Know the Answer?

Yosef Sherman · Answer 1

1. Dr Bank 1800

Cr Account receivable 1800

(When check is received from a customer)

2. Dr Account Receivable 1800

Cr bank 1800

(NSF entry)

Explanation:

When Sales are made to customer we create a entry, we debit the account receivable and credit the sales and when check is receivable we create entry in the books that debit Bank and credit account receivable but after sending check to bank for clearing we came to know that there is insufficient fund in customer account and is bounced back by bank then we create an entry of NSF (non sufficient fund).