(--) Secure! H4 0 Help Save& Exit Submit Following is a bank reconciliation for

Question

(--) Secure! H4 0 Help Save& Exit Submit Following is a bank reconciliation for Zocar Enterprises for June 30, 2018. 3 Balance an of 6/30/2018 Deposit in traneit Outstanding cheoks Note eollected by bank Dank serviee charge NSP check $24,735 21,435 4,550 (sos) 1,915 (20) points Adjusted cash balance as of 6/30/2018 25,480 25,480 When reviewing the bank reconciliation, Zocar's auditor was unable to locate any reference to the NSF check on the bank statement. Furthermore, the clerk who reconciles the bank account and records the adjusting entries could not find the actual NSF check that should have been included in the bank statement. Finally, there was no specific reference in the accounts recelvable supporting records identifying a party who had written a bad check. Required a. Prepare the adjusting entry that the clerk would have made to record the NSF check. (If no eptry Is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet

Explanation / Answer

An NSF check is a check that was not honored by the bank of the person or company writing the check because that account did not have a sufficient balance. As a result, the check is returned without being honored or paid. (NSF is the acronym for not sufficient funds. Often the bank describes the returned check as a return item. Others refer to the NSF check as a "rubber check" because the check "bounced" back from the bank on which it was written.) When the NSF check comes back to the bank in which it was deposited, the bank will decrease the checking account of the company that had deposited the check. The amount charged will be the amount of the check plus a bank fee.

Adjusting entry for recognising the NSF Check:-

Credit

Accoun Titles Debit

Credit

Account Receivable $1150    Cash $1150

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