Asked by avinash pradhan on Oct 01, 2024
Which of the following is true of check collection?
A) Checks and other drafts collected through the banking system usually have two parties-the drawer and the drawee bank.
B) If the payee deposits the check at a bank other than the drawee bank,the latter will take a series of steps necessary to reflect the deposit as a credit to the payee's account.
C) If the payee deposits the check at the same bank as the drawee bank,the depositary bank will make the ledger entry showing the deposit as a credit to the payee's account.
D) If the drawee and depositary banks are in the same town or county,the depositary bank will indorse the check and deliver it to the drawee bank for payment.
Check Collection
The process by which banks handle the clearing of checks, ensuring the transfer of funds from the check writer's account to the recipient's account.
Banking System
The network of institutions, laws, regulations, and practices that deliver financial services including deposit, loan, and payment services.
Drawer
The party that writes and signs a cheque, instructing a bank to pay a specific amount of money to the bearer or a named party.
- Understand the process and legal implications of check collection within the banking system.
Learning Objectives
- Understand the process and legal implications of check collection within the banking system.