The way to resolve a check with nonsufficient funds is to void the payment in the system.

• A. True
• B. It depends on the system
• C. Not applicable
• D. False

Answer: (D)

When a check is NSF, the funds were not actually received, so the bookkeeping must undo the recorded cash receipt and the related accounts receivable. Simply voiding the payment in the system would remove the payment record but wouldn’t correctly reflect that the customer still owes money, which can leave the accounts and revenue balances inaccurate. The standard approach is to reverse the original cash receipt (and any revenue/receivable impact) and then reattempt collection or re-bill the customer, following the system’s specific procedures. Because the solution depends on system processes and the reversal of the posting is typically required, the statement is not correct.