Question

For each of the following items a through g, indicate whether its amount (1) affects the bank or book side of a bank reconciliation, (2) represents an addition or a subtraction in a bank reconciliation, and (3) requires an adjusting journal entry.

Bank or Book Side Add or Subtract Adj. Entry or Not

f. NSF checks. . . . . . . . . . . . . . .

Short answer

Answer

1. Book side will be affected

2. Represents subtraction is a bank reconciliation statement

3. Adjustment is required in journal entry

Step-by-step solution

Step-by-Step SolutionStep 1: Meaning of Non-Sufficient Funds

NSF refers to when the account holder does not have enough money in their bank account to pay the check written against it.

Effect of transaction

	Bank or Book	Add or subtract	Adj. Entry or Not
NSF checks	Book	Subtract	Adjustment required