A Cheque in the Amount of $425 Was Returned by the Bank

Multiple Choice

A cheque in the amount of $425 was returned by the bank marked "NSF". A bank service fee of $20 was charged for processing the returned cheque. Upon notification of the NSF, the company who initially received the customer's cheque will most likely

A) reverse the customer's payment on their books to re-establish the accounts receivable for $425.
B) make no changes to the accounting records but advise the customer that the payment was declined and is still outstanding.
C) reverse the customer's payment on their books to re-establish the accounts receivable for $425 and debit bank charges expense for the bank service fee of $20.
D) reverse the customer's payment on their books to re-establish the accounts receivable for $425 and debit the accounts receivable for the bank service fee of $20.