You Did Some Electrical Work for a New Neighbor Who

question 34

Essay

You did some electrical work for a new neighbor who recently moved in next door. However, you are concerned about the check you received from the neighbor for your services. Frankly, you wonder if the neighbor has money to cover the amount of the check simply because you owe Marlin, a friend money and wish to pass your neighbor's check along to her. When indorsing the check, what can you do to protect yourself if Marlin has trouble collecting from your neighbor?

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Definitions:

Left Side

In accounting, this refers to the debit side of a double-entry bookkeeping system, indicating increases in assets or expenses and decreases in liabilities or equity.

Debit Side

The left side of an accounting ledger where increases in assets and expenses or decreases in liabilities and equity are recorded.

Normal Balance

The side of an account (debit or credit) where increases in the account are recorded, reflecting the account's usual positive balance.

Expense

Outflows or other using up of assets or incurrences of liabilities during a period from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity's ongoing major operations.