05-03task (4)

School: Troy University, Troy - Course: HIS 101 - Subject: Accounting

5.03 Special Banking Procedures Total Points: 70 1.ABC Company has received checks from customers; these are deposited into the ABC Company's bank account. If a customer gives ABC Company a check that is not good— a non-sufficient fund (NSF) check (also called a dishonored or bounced check), then the bank notifies ABC Company. How does the NSF check affect the Cash in Bank for ABC Company? Increase or decrease?Increase 2.Due to the NSF check, the company now "owes" ABC Company for the amount of the check and any charges from the bank. What account will ABC Company use to record the fact that the customer owes them?Accounts receivable, Cash 3.When the business makes a journal entry for the NSF check: a.What account will they debit?Accounts receivable b.What account will they credit?cash 4.In the checkbook or check register, will a business add or deduct the bank service charge? deduct 5.When the bank charges a business a "bank charge", the business needs to make a journal entry. a.What account would you debit?50 b.What account would you credit?500 6.In your own words, explain the purpose of a petty cash fund.to allow for the purchase of small items © ACCESS Virtual Learning 2022

7.When money is transferred from the Cash account to the Petty Cash account: a.What account will they debit?Service Expense b.What account will they credit?cash