When a Customer's NSF Check Is Returned to a Business

question 108

Multiple Choice

When a customer's NSF check is returned to a business with its bank statement, the business should make a journal entry increasing

• A) Cash.
• B) Accounts Receivable.
• C) Accounts Payable.
• D) Allowance for Doubtful Accounts.

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Definitions:

Cease-And-Desist Order

An administrative or judicial order prohibiting a person or business firm from conducting activities that an agency or court has deemed illegal.

Federal Trade Commission

An independent agency of the United States government, established to prevent unfair business practices and promote consumer protection.

Environmental Protection Agency

A U.S. federal agency responsible for the protection of human health and the environment by writing and enforcing regulations based on laws passed by Congress.

Fuel Economy

A measure of how far a vehicle can travel on a specific amount of fuel, reflecting the efficiency of the vehicle’s fuel consumption.