A Bank Overdraft Occurs

question 123

Multiple Choice

A bank overdraft occurs

• A) after a bank reconciliation.
• B) when a cheque is written for more than the amount in the bank account.
• C) when a previously deposited customer cheque bounces.
• D) when an error is discovered.

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Definitions:

Monetary Unit

The standard unit of currency in which financial transactions are recorded and reported in a company's financial statements.

Settlement Date

The day on which cash is received or paid.

Exchange Rate

The price at which one currency can be exchanged for another, influencing international trade and investments.

Credit Terms

The conditions, including payment deadlines and interest, under which credit is extended by a seller to a buyer.