The Journal Entry for a NSF Check Involves a Credit

question 74

True/False

The journal entry for a NSF check involves a credit to Accounts Receivable.

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Definitions:

Percent of Sales Method

A financial forecasting tool used to estimate certain balance sheet and income statement accounts based on a projected sales figure.

Uncollectible Accounts

Accounts receivable that are considered unlikely to be collected and are written off as a bad debt expense.

Credit Sales

Sales where the customer is allowed to pay for the product or service at a later date, extending credit.

Bad Debt Expense

The estimated amount of accounts receivable that is not expected to be collected.