You Are Trying to Explain Debit and Credit Memos That

question 146

Essay

You are trying to explain debit and credit memos that appear on bank statements and whether these will increase or decrease your company's bank account balance.Complete the following table to help your new staff understand.

$\begin{array}{|l|c|c|}\hline&\text { Debit }&\text { Increases or }\\&\text { or }&\text { Decreasesthe }\\&\text { Credit }&\text { Company's Bank }\\\text { ITEM }& \text { Memo }&\text { Account Balance } \\\hline \text { EFT payment } & \\\hline \begin{array}{l}\text { Bank correction of an error due to } \\\text { posting another customer's check to } \\\text { your account }\end{array} & & \\\hline \text { Service Charge } & \\\hline \begin{array}{l}\text { Note and interest collected for our } \\\text { company }\end{array} &\\\hline \text { NSF check } & \\\hline \text { Bank correction of an error recording } &\\ \text { a } \$ 250 \text { deposit as } \$ 520 & \\\hline \text { EFT deposit } & \\\hline\end{array}$

---

Definitions:

Technological Knowledge

Society’s understanding of the best ways to produce goods and services.

Human Capital

The collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value.

Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain constant.

Catch-Up Effect

The theory that poorer economies will tend to grow at faster rates than wealthier ones, allowing them to catch up in terms of income and other economic measures.