Accompanying the Bank Statement Was a Debit Memo for an NSF

question 141

Multiple Choice

Accompanying the bank statement was a debit memo for an NSF check received from a customer. What entry is required in the company's accounts?

• A) debit Other Income; credit Cash
• B) debit Cash; credit Other Income
• C) debit Cash; credit Accounts Receivable
• D) debit Accounts Receivable; credit Cash

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Definitions:

Thinking

Thinking is the process of considering or reasoning about something, encompassing judgment, decision-making, and problem-solving among other cognitive activities.

Stress

A psychological and physical response to demands or threats, often characterized by feelings of tension, worry, and heightened arousal.

Hindsight Bias

The tendency to believe, after learning an outcome, that one would have foreseen it, often referred to as the "I-knew-it-all-along" phenomenon.

Confirmation Bias

Confirmation bias is the tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.