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

question 182

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) A net loss.
• D) Expense for Bad Debts.

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Definitions:

Labelling Act

Legislation that mandates the disclosure of information on the packaging of consumer products to ensure transparency and consumer safety.

Unconscionable Transactions Relief Act

Legislation providing remedies against agreements made under unfair conditions.

Protection

Measures or actions taken to guard against harm, damage, loss, or any unwanted outcome, often referring to safeguarding people, property, or interests.

Promissory Note

A written promise to pay a specified sum of money to another party under agreed terms at a specified time.