Final answer:
On a bank reconciliation, a check from customers returned as NSF and an error made by the bank in recording a deposit require a journal entry. Deposits in transit and outstanding checks are timing differences and will not need adjustments. An overdraft occurs when a check is written for more than the account balance.
Step-by-step explanation:
The items on a bank reconciliation that require a journal entry to bring the Cash account up-to-date are the check from customers returned as NSF (non-sufficient funds) and an error made by the bank in recording a deposit. A deposit in transit and an outstanding check do not require a journal entry from the company because they are timing differences that will resolve themselves when the bank processes the transactions. However, an NSF check represents money that the business thought it had received but did not, and a bank error in recording a deposit means the cash balance on the company's book is incorrect. These both require adjustments to the Cash account.
Uses of Checks
To use a check for payment for goods and services, you need to write a check from your checking account, which is then given to the store. The store deposits this check into their bank account to get the money. An overdraft occurs when you write a check for an amount greater than the balance in your checking account, which could result in the bank refusing the check or charging an overdraft fee.