Misconception · MIS:returned-check-is-a-bank-error

Mistaken idea “A returned customer check is a bank error”

Mistaken reasoning: This mistake leaves cash overstated after the bank rejects a customer's payment.

Updated Sep 11, 2026 Review due Dec 11, 2026

Why this is mistaken

The bank has already removed the failed deposit. The entity must reduce Cash and restore the customer receivable on its books. A separate bank error would require evidence that the bank processed a valid item incorrectly.

Where to watch

When this mistake may appear

  • The bank removed the deposited amount.
Check your work

Your work may contain this mistake if:

  • Adjusts the bank side or leaves the customer's receivable settled.