Question

outstanding checks

have been returned to the business for nonpayment.
havent been presented to the bank for payment but have been subtracted in the checkbook.
havent been presented to the bank for payment and havent been subtracted from the checkbook.
have been subtracted on the bank records but not the checkbook records.

question 12 (5 points)

a nonsufficient-funds check was returned to your company. how does the bank treat this on your bank statement?

its added to the bank balance.
its shown as a debit memo.
its shown as a credit memo.
none of the above

Explanation:

Define outstanding checks

Using the Outstanding Checks knowledge point
Outstanding checks are checks written and recorded by a company that have not yet been presented to the bank for payment.

Analyze the treatment of an NSF check

Using the Nonsufficient Funds Fee knowledge point
A nonsufficient-funds (NSF) check reduces the depositor's bank account balance. The bank notifies the depositor of this deduction using a debit memorandum (debit memo), because from the bank's perspective, a customer's deposit account is a liability, and a debit reduces this liability.

Answer:

Question 1

• have been returned to the business for nonpayment.
• haven't been presented to the bank for payment but have been subtracted in the checkbook. (Correct answer)
• haven't been presented to the bank for payment and haven't been subtracted from the checkbook.
• have been subtracted on the bank records but not the checkbook records.

Question 2

• It's added to the bank balance.
• It's shown as a debit memo. (Correct answer)
• It's shown as a credit memo.
• None of the above