Accompanying the Bank Statement Was a Debit Memorandum for an NSF

question 16

Multiple Choice

Accompanying the bank statement was a debit memorandum for an NSF (not sufficient funds) cheque received from a customer.What entry is required in the company's accounts?

• A) DR Other revenue\(\quad\)\(\quad\)\(\quad\)\(\quad\)\(\quad\) CR Cash
• B) DR Cash\(\quad\)\(\quad\)\(\quad\)\(\quad\)\(\quad\)\(\quad\)\(\quad\)\(\quad\) CR Other revenue
• C) DR Cash\(\quad\)\(\quad\)\(\quad\)\(\quad\)\(\quad\)\(\quad\)\(\quad\)\(\quad\) CR Accounts receivable
• D) DR Accounts receivable\(\quad\)\(\quad\)\(\quad\) CR Cash

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Definitions:

Manufacturer

An individual or company that makes goods for sale using raw materials and parts, typically in a large-scale operation involving machinery.

Seller

A seller or company presenting products or services for acquisition to buyers or other enterprises.

Mortgage Loan

A loan used to purchase property or real estate, which is then used as collateral for the loan.

Defective Product

An item that fails to meet acceptable quality or safety standards, potentially causing injury or harm to consumers.