When a cheque is returned from the bank and is marked refer to drawer where is the transaction recorded?

When a cheque is returned from the bank marked "refer to drawer," the transaction is recorded as a debit in the accounts receivable or cash account, depending on the initial transaction. This indicates that the payment was not successfully processed and the funds are not available. Additionally, it may also be recorded as an expense or fee if the bank charges a return item fee. Overall, this reflects a reversal of the original transaction in the accounting records.