A cheque in the amount of $455 was returned by the bank marked "NSF". A bank service fee of $15 was charged for processing the returned cheque. Upon notification of the NSF, the company who initially received the customer’s cheque will most likely 1. reverse the customer’s payment on their books to re-establish the accounts receivable for $455 and debit the accounts receivable for the bank service fee of $15. 2. reverse the customer’s payment on their books to re-establish the accounts receivable for $455. 3. reverse the customer’s payment on their books to re-establish the accounts receivable for $455 and debit bank charges expense for the bank service fee of $15. 4. make no changes to the accounting records but advise the customer that the payment was declined and is still outstanding.
A cheque in the amount of $455 was returned by the bank marked "NSF". A bank service fee of $15 was charged for processing the returned cheque. Upon notification of the NSF, the company who initially received the customer’s cheque will most likely 1. reverse the customer’s payment on their books to re-establish the accounts receivable for $455 and debit the accounts receivable for the bank service fee of $15. 2. reverse the customer’s payment on their books to re-establish the accounts receivable for $455. 3. reverse the customer’s payment on their books to re-establish the accounts receivable for $455 and debit bank charges expense for the bank service fee of $15. 4. make no changes to the accounting records but advise the customer that the payment was declined and is still outstanding.
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter5: Internal Control And Cash
Section: Chapter Questions
Problem 2SEQ
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A cheque in the amount of $455 was returned by the bank marked "NSF". A bank service fee of $15 was charged for processing the returned cheque. Upon notification of the NSF, the company who initially received the customer’s cheque will most likely
1. reverse the customer’s payment on their books to re-establish the accounts receivable for $455 and debit the accounts receivable for the bank service fee of $15.
2. reverse the customer’s payment on their books to re-establish the accounts receivable for $455.
3. reverse the customer’s payment on their books to re-establish the accounts receivable for $455 and debit bank charges expense for the bank service fee of $15.
4. make no changes to the accounting records but advise the customer that the payment was declined and is still outstanding.
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