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    sherryirene's Avatar
    sherryirene Posts: 1, Reputation: 1
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    #1

    Nov 10, 2010, 10:52 AM
    What effect does a credit memo in a bank statement have on the cash account?
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    Just Looking Posts: 1,610, Reputation: 480
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    #2

    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.

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