Accompanying the bank statement was a debit memorandum for an NSF check received from a customer.This item would require an adjusting entry including a:
A) debit to Accounts Receivable.
B) debit to Cash.
C) debit to Accounts Payable.
D) credit to Accounts Payable.

Question

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An NSF check means that the customer's payment bounced due to insufficient funds in their account. As a result, the amount of the check needs to be added back to the Accounts Receivable (since it was previously recorded as a sale) and deducted from Cash. Therefore, the adjusting entry should include a debit to Accounts Receivable and a credit to Cash.

Accompanying the Bank Statement Was a Debit Memorandum for an NSF