Show the effects of the following transactions on the financial statements in the horizontal statements model. (a) Recognize the NSF check, (c) Customer redeems the check by giving Montgomery $390 cash in exchange for the bad check. The additional $20 was a service fee charged by Montgomery. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity and NA to indicate the element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign.)
Assets Income statement
Cash +Accts Rec.=Liabilities + Equity Revenue - Expense= Net Inc. Statement of cash flow
b. Is the recognition of the NSF check on Montgomery's books an asset source, use, or exchange transaction?
Asset source
Asset use
Asset exchange
d. Select which of the following is the correct answer.
Asset exchange is 390.
Asset source is 390.
Asset use is 390.
Asset exchange is 370 and Asset source is 20.
Asset source is 370 and Asset use is 20.
Asset exchange is 390 and Asset use is 20.