Asked by Kerosi Giddy on Jun 26, 2024
Verified
Because the speed of check-processing time is increasing, to avoid overdrafts, an account-holder needs to verify that funds are available to cover a check when it is written.
Check-Processing Time
The duration it takes for a bank to process a check payment, clearing the funds from the payer's account to the payee.
Overdrafts
A financial situation where an individual withdraws or spends more money than is available in their account, leading to a negative balance.
Account-Holder
An individual or entity that owns an account in a bank or similar financial institution.
- Gain insight into the policies governing the processing of aged checks by financial institutions.
- Understand the responsibilities of banks concerning the payment or refusal of checks according to their presentation date.
Verified Answer
EN
edward nuarpahJul 03, 2024
Final Answer :
True
Explanation :
With the increase in check-processing speed, checks can clear more quickly than in the past. Therefore, it's important for an account-holder to ensure funds are available when the check is written to avoid overdrafts.
Learning Objectives
- Gain insight into the policies governing the processing of aged checks by financial institutions.
- Understand the responsibilities of banks concerning the payment or refusal of checks according to their presentation date.