BANKING AFFAIRS

Detailed explanation-1: -If a customer has $20 in a checking account and attempts to make a $40 purchase with a debit or check card and has not opted-in to the bank’s overdraft plan, the transaction will be declined by the retailer.

Detailed explanation-2: -The bank may charge non-sufficient funds (NSF) fees if permitted by the terms of your account agreement.

Detailed explanation-3: -What is a nonsufficient funds (NSF) fee? The fee your financial institution charges when you bounce a payment is called a nonsufficient funds, or NSF, fee. You may also get hit with an NSF fee if you try to deposit or cash a check and the issuer doesn’t have enough money in their account to pay for it.

Detailed explanation-4: -An NSF fee is commonly charged by banks when an account lacks the funds needed to cover a transaction, and the bank does not allow the transaction to go through. The result may be in the form of bounced checks or denied electronic bill payments.

Detailed explanation-5: -Debit the amount of the NSF check from the Accounts Receivable account. For details on debiting an amount from a ledger account, see Debiting and Crediting Amounts Using Journal Entries. Credit the amount of the NSF check to the bank account affected by the NSF check.