The Journal Entry to Record the Entry of a Customer's

question 117

Multiple Choice

The journal entry to record the entry of a customer's nonsufficient funds check would include a:

• A) debit to Revenue.
• B) credit to Cash.
• C) debit to Collection Expense.
• D) credit to Accounts Receivable.

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Definitions:

Fiscal Period

A specific time period for which an organization prepares financial statements, typically a year, but can also be a quarter or month.

Deferred Expense

A deferred expense is an expenditure that is made in advance and recorded as an asset until it is consumed or its value expires, at which point it is charged to expense.

Accrual Basis

An accounting method where transactions are recorded when they are earned or incurred, regardless of when cash is exchanged.

Matching Concept

An accounting principle that requires the expenses to be matched with the revenues they helped to generate in the same accounting period.