Question

The following items may appear on a bank statement:

a. NSF check
b. EFT deposit
c. Service charge
d. Bank correction of an error from recording a $300 check as $30

Required:
Indicate whether the item would appear as debit or credit memo on the bank statement and whether the item would increase or decrease the balance of your account.

Answer 1

Answer:

a. NSF check  ⇒ non-sufficient funds check: it is a debit memo that decreases the account balance. One or more of the checks from third parties that you deposited didn't have enough funds to be cashed.

b. EFT deposit  ⇒ electronic funds transfer: credit memo that increases the account balance. Someone deposited money to your account through an electronic transfer, e.g. online transfer.

c. Service charge  ⇒ debit memo that decreases the account balance. This is a fee charged to you by the bank for the banking services provided.

d. Bank correction of an error from recording a $300 check as $30 ⇒ debit memo that decreases account balance. A check that you wrote was erroneously recorded as $30 when its value was $300.