Question

How would you prepare an entry to record NSF check returned 394?

Answer 1

To record an NSF check returned, debit Accounts Receivable and credit Bank for the same amount of the check.

Step-by-step explanation:

To prepare an entry to record a non-sufficient funds (NSF) check returned, you need to debit the Accounts Receivable account and credit the Bank account. This journal entry reflects the fact that a customer's payment bounced and is not valid. The entry would be:

1. Debit Accounts Receivable for the amount of the returned check (394).
2. Credit Bank for the same amount (394).