Once a month, a client processes all of the customer direct debit payments in one batch. A customer’s payment has been returned stating that the customer’s account has been closed.
What is the first thing that needs to be done to record this transaction?
- Create an expense transaction, allocate to bank fees and then to the client as a billable expense.
- Create a service item called bounced checks.
- Create a journal entry to credit the bank account and debit the Accounts Receivable account.
- Create an invoice to the customer, and allocate the amount directly to the bank account in the account details.