Why would terms of sale be changed for a customer who paid with an NSF cheque?

Expert Solution

In the event that you process enough transactions, at some point or another you'll need to represent for a returned check. A cheque that is returned unpaid is given numerous marks, (for example, NSF or bounced check) however the bookkeeping treatment is the same.

The methodology sketched out underneath work viably for POS clients in both single stores and chains. Exercises, for example, accepting bank notification of charges and returned things regularly take place at the headquaters as opposed to the store level, so these tasks are acted in monetary programming instead of POS. In any case, in POS an installment can be acknowledged by tapping the Take Payment button at the base of the New Sales Receipt window. This permits a client to replace a returned cheque at any store in a chain. At the point when POS trades information, the client's record will be refreshed.

For example, how about we expect we got a returned cheque for $100 from a client named Customer with cheque returned unpaid. For taking care of the returned thing, the bank charged a $50 expense, and we'll just look to recover from the client the real bank charges. Rather than investigating each fee independently, a few firms set a fixed expense to charge clients. Ideally, this client will replace the unpaid cheque with another, yet we'll have to record the transaction in our cash account before that happens.

Here are 2 strategies to account for the returned cheque:

1.make another invoice to the client for the measure of the returned cheque and charges your firm includes and a general journal entry for the cost of the expenses the bank charged

2. pass 1 journal entry for the whole procedure

In spite of the fact that the subsequent strategy seems less complex, we suggest the principal technique since it preserves normal accounting procedures and gives a superior paper trail by making a invoice that can be sent to the client to help gathering the bounced cheque.

ekkarill92 answered 2 years ago

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