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 is B

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.