tpx Chapter 5 Qui help Save & Ex Subme Fiymn Company\'s monthly bank statement s
ID: 2580086 • Letter: T
Question
tpx Chapter 5 Qui help Save & Ex Subme Fiymn Company's monthly bank statement showed the eneing adjustment for a deposit in transt of $1 500 baiance of cash of $18 500 The bank reconoliation for the period showed an checks of $2.000,NSE check of $700, bank service charges of $30 and the EPT trom a customer in payment of the customer's account of $1.500 2.00 points Requred information Use the nformation above to answer ne roowing gueston Wst youinal enty should be recordod by Fyn Company for the NSF check O Debit Accounts Recevable ane crecit Cash for $700 O Debin Cash and crecit AccounssRevas tor $700 O Debin Cash and credt Accounts Payable for 5700 Type here to search
Explanation / Answer
Answer: Debit Accounts Receivable and credit Cash for $700.
On receipt of check, the entry that would have been passed would be debit cash and credit accounts receivable. Now since this check is returned due to insufficient funds, the earlier entry will have to be reversed by debiting accounts receivable and crediting cash.
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