The Bank Statement for Tetra Company Contained the Following Items

Multiple Choice

The bank statement for Tetra Company contained the following items: a bank service charge of $10; a credit memo for interest earned, $15; and a $50 NSF check from a customer. The company had outstanding checks of $100 and a deposit in transit of $300. The entry to record the customer's NSF check will:

A) increase the Accounts Receivable balance.
B) decrease the Cash account.
C) decrease equity.
D) increase the Accounts Receivable balance and decrease the Cash account balance.