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View Full Version : What effect does a credit memo in a bank statement have on the cash account?


sherryirene
Nov 10, 2010, 10:52 AM

Just Looking
Nov 10, 2010, 11:00 AM
A credit memo on a bank statement increases a company's checking account balance. Since the cash amount is increased, you need to make an entry to debit cash and credit the appropriate account.

One example could be interest earned on the account. In this case, you would debit Cash and credit Interest Earned.