Harp Company accepted a check from Jasper Company as payment for services rendered. Harp's bank statement revealed that the Jasper check was an NSF check. What effect will the entry to record the NSF check have on the accounting equation of Harp Company?
A)Option A
B)Option B
C)Option C
D)Option D

Question

Harp Company accepted a check from Jasper Company as payment for services rendered. Harp's bank statement revealed that the Jasper check was an NSF check. What effect will the entry to record the NSF check have on the accounting equation of Harp Company? 
A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

The adjusting entry will increase one asset (accounts receivable) and decrease another asset (cash).

Harp Company Accepted a Check from Jasper Company as Payment