Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 39 - No. 37)
If a check is returned by the bank due to insufficient funds, how should this be reflected in the accounting records?
Increase the cash balance.
Debit the bank account.
Credit the bank account.
Make no change.
Explanation
A returned check requires a credit to the bank account and a debit to the account receivable.
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