What is the preferred method of dealing with "bounced checks" when the original transaction included sales tax?
a. Generate a statement for the customer.
b. Invoice the customer for the purchase again.
c. Enter a bill for the customer to pay.
d. Create a credit memo for the customer.
What is A Bounced Check:
One of the risks that a company takes one when accepting checks as a form of payment is that there may be a Bounced Check. A Bounced Check occurs when the payee does not have sufficient funds in their account to cover the check.
Answer and Explanation:
The correct answer is a. Generate a statement for the customer.
- Entering a bill or creating a new invoice will result in double-counting the revenue, which is incorrect. By generating a statement for the customer, the customer will be made aware of the bounced check and will be asked to pay again.
Become a member and unlock all Study Answers
Try it risk-free for 30 daysTry it risk-free
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
from Financial Accounting: Homework Help ResourceChapter 3 / Lesson 20