NSF Checks Bookkeeping Procedures

When a check paid to the PTA is returned unpaid by the bank (NSF), note it in the ledger and checkbook register along with the charges levied by the bank. Treat the bank charge as a disbursement. Record the check as a returned NSF check and enter the amount of the check into the deposit column and place parentheses around the amount. This reverses the original transaction.

For instance, the original entry was under “Deposit” so the returned check should also be under “Deposit.”

Check #1234 Brown, 2 memberships          $20.00
Check #1234 Brown, Returned for NSF     ($20.00)

When funds are recovered, add the amount back into the checkbook register and the ledger. Treat this as a deposit.

For each returned check, use a separate deposit ticket for redeposit or circle amount of check redeposited, if included with other checks being deposited.

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