The accounting treatment for a dishonored cheque is; debit
-
A.
customer’s account; credit bank account -
B.
bank account; credit customer’s account -
C.
customer’s account; credit sales account -
D.
sales account; credit customer account
Correct Answer: Option B
Explanation
Treatment: Before any notice of cheque being dishonored: When a supplier (payee) receives a cheque from a customer(drawer) the supplier’s cash book is debited and the customer’s account in the sales ledger is credited with the amount of the cheque.