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Returned check definition

Accounting Tools

What is a Returned Check? A returned check is a check that is not paid by the financial institution on which it was drawn. The party that initially received this check and cashed it must reverse the transaction in its accounting records once it has been notified by the bank.

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Bounced check definition

Accounting Tools

Related Courses Bank Reconciliation Essentials Bookkeeping Guidebook How to Audit Cash What is a Bounced Check? A bounced check is a check that does not have a sufficient amount of cash in the underlying bank account to support the payment, so the issuing bank refuses to honor it.

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Bank charge definition

Accounting Tools

Related AccountingTools Courses Bank Reconciliation Essentials Corporate Cash Management How to Audit Cash Related Articles Bank Debits Debit Memo These expenses are not classified as cost of goods sold expenses, since they are not related to the sale of goods or services.

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Check guarantee definition

Accounting Tools

Related Courses Credit and Collection Guidebook Effective Collections What is a Check Guarantee? A check guarantee is a service provided to merchants, ensuring that a check will be paid. If a check bounces, the guarantor steps in and pays the amount of the check to the merchant; the guarantor then pursues payment of the check.

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Overdraft definition

Accounting Tools

An overdraft is a short-term line of credit granted by a bank to an account holder when checks presented against the account exceed the amount of cash available in the account. This service keeps account holder checks from bouncing. Related Articles Cash Overdraft

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Debit memo definition

Accounting Tools

Debit Memos on Bank Statements A bank creates a debit memo when it charges a company a fee on its bank statement , thereby reducing the balance in the company's checking account. Related Article Credit Memo Of the usages noted here, bank transactions represent the most common usage of debit memos.

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NSF check definition

Accounting Tools

Related Courses Bank Reconciliation Essentials Bookkeeping Guidebook How to Audit Cash What is an NSF Check? An NSF check is a check that was not honored by the bank of the entity issuing the check, on the grounds that the entity's bank account does not contain sufficient funds.