Asked by Daisy Chavez on Jul 22, 2024
Verified
Under Article 4,which of the following refers to the drawee-payor bank's deadline on a check?
A) Midnight deadline
B) Clearing house
C) Banking day
D) Afternoon deadline
Midnight Deadline
A cutoff point set at 11:59 PM, often used in legal, financial, and operational contexts to mark the end of a given day or deadline.
Drawer-payor Bank
Refers to the bank upon which a check is drawn and is responsible for paying the check when it is presented.
Banking Day
A business day during which financial institutions are open for conducting banking transactions.
- Comprehend the effects of the Expedited Funds Availability Act regarding check holds and the accessibility of funds.
Verified Answer
MB
michael brianJul 25, 2024
Final Answer :
A
Explanation :
Under Article 4,the drawee-payor bank must settle for the check before midnight of the banking day of its receipt of the check,which means that it must give the depositary bank funds or a credit equal to the amount of the check.Once it settles for the check,the drawee-payor bank has until midnight of the banking day after the banking day of receipt to pay the check or to return the check or send notice of dishonor.This deadline for the drawee-payor bank's action on the check is known as the bank's "midnight deadline."
Learning Objectives
- Comprehend the effects of the Expedited Funds Availability Act regarding check holds and the accessibility of funds.