This month's bank statement includes a check from a customer that was marked NSF.How would this item be treated on the bank reconciliation? Is it added to or deducted from the bank balance or the company's cash (book)balance?
A) It would be deducted from the book balance.
B) It would be added to the bank balance.
C) It would be deducted from the bank balance.
D) It would be added to the book balance.

Question

Quizplus · Accepted Answer

An NSF (non-sufficient funds) check means the customer’s check bounced, so the amount needs to be deducted from the company's cash (book) balance as it was previously recorded as a deposit.

This Month's Bank Statement Includes a Check from a Customer