ACC 281 Week 2 Dq' 1
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ACC 281 Week 2 Dq 1
Ashford
What effect does a debit memo in a bank statement have on the Cash account?
A bank debit memo is an entry on the bank statement refers to a deduction from the account's balance. Edmonds (2010) explains, "Since a checking account is an asset (cash) to the depositor, a bank statement debit memo requires a credit entry to the cash account on the depositor's books". (p. 145). For example, any time I use my debit card, the amount is applied directly to my checking account subtracting the amount from my available balance. If a debit memo in the amount of 50 for bank fee such as insufficient funds, it decreases the balance by 50. The businesses cash account should be credited since the businesses asset account was reduced.
What effect does a...