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  3. a cheque in the amount of $425 was returned by the

A cheque in the amount of $425 was returned by the bank marked "NSF". A...

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Accounting

A cheque in the amount of $425 was returned by the bank marked "NSF". A bank service fee of $20 was charged for processing the returned cheque. Upon notification of the NSF, the company who initially received the customers cheque will most likely

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 reverse the customers payment on their books to re-establish the accounts receivable for $425.

make no changes to the accounting records but advise the customer that the payment was declined and is still outstanding.

reverse the customers payment on their books to re-establish the accounts receivable for $425 and debit the accounts receivable for the bank service fee of $20.

reverse the customers payment on their books to re-establish the accounts receivable for $425 and debit bank charges expense for the bank service fee of $20.

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