The Following Are Terms Used to Describe Banks in the Collection

question 16

Multiple Choice

The following are terms used to describe banks in the collection system except:

• A) the collecting bank
• B) the depository bank
• C) the intermediary bank
• D) the maker bank
• E) the payor bank

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Definitions:

Preexisting Duty Rule

A legal principle that an existing obligation or duty cannot serve as consideration for a new contract.

Rescission

The act of canceling a contract, returning both parties to their pre-contractual situation.

Mutually Agree

A situation in which two or more parties come to a common understanding or consent on a matter.

Executed

indicates that an operation or task has been successfully carried out or implemented to its full extent.