What outcome occurs when an NSF reversal is applied?

• A. It increases the account balance
• B. It reduces the outstanding NSF amount and cancels the original payment
• C. It creates a new fee
• D. It does not affect the account

Answer: (B)

An NSF reversal undoes a previously recorded non-sufficient-funds event. When a payment is rejected for lack of funds, the system records an outstanding NSF amount and marks the original attempt as not completed. Applying a reversal cancels that original payment entry and reduces the amount still outstanding under NSF, reflecting that the issue has been resolved or funds are now available. Since there was no actual funds transfer during the NSF, the reversal does not increase the account balance. It simply clears the failed transaction and prevents a duplicate attempt or fee from being charged later.