Accounting for IGCSE & O level - Accounting Procedures (Section 7 - No. 50)
If a company receives a cheque from a customer and it is later dishonored by the bank, what is the impact on the company’s records?
The customer's account balance decreases.
The customer's account balance increases.
The bank account balance increases.
The sales ledger balance is unchanged.
Explanation
If a cheque is dishonored, the customer has not paid, so the amount they owe increases.
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