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Your Friend,Mike,has Just Started a Business and Comes to You

question 115

Essay

Your friend,Mike,has just started a business and comes to you with a question."I'm confused.I have a memo included with my bank statement indicating a $55 service charge for printing new checks.Since you're an accounting major,maybe you can explain to me why they call it a 'debit memorandum,' even though they are deducting this amount from my account.When I took Accounting in school,I could have sworn that a decrease in the Cash account would be a credit and not a debit."

Required
In a short paragraph,explain this issue to your friend.


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