Which of the following statements about the NSF Fee procedure is true?

• A. It will not be matched to any transactions because it is a standalone debit adjustment
• B. True, it is always posted to the original transaction
• C. False, it affects the unrelated account
• D. It requires supervisor approval

Answer: (C)

NSF fees are handled as a separate charge recorded in a dedicated fees or NSF fee account, rather than being merged into or directly adjusted against the original payment item. This keeps the original transaction’s records intact for reconciliation while clearly accounting the cost as a fee in a separate ledger. That’s why the procedure is described as affecting an unrelated account rather than the original transaction itself. The other options don’t fit because the fee isn’t simply a standalone debit tied to nothing, it isn’t typically posted to the original item, and supervisor approval isn’t a universal requirement for these standard fees.