If a check marked NSF is returned from the bank, an adjusting entry crediting Cash is needed.

Name: If a check marked NSF is returned from the bank, an adjusting entry crediting Cash is needed.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When a check is marked NSF (Non-Sufficient Funds), it means the check cannot be processed due to insufficient funds in the payer's account. To adjust for this, the Cash account is credited to decrease the balance, reflecting the fact that the expected funds were not received.

If a Check Marked NSF Is Returned from the Bank