When a Payor Bank Gets an Item Payable from a Customer's

question 62

Multiple Choice

When a payor bank gets an item payable from a customer's account with insufficient funds, the bank may:

• A) dishonor the item and return it.
• B) pay the item and charge it to the customer's account even though an overdraft is created.
• C) Either may happen.
• D) Neither is allowed.

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Definitions:

CCA Class

Categories under the Capital Cost Allowance system in Canada, used to determine the depreciation rate for tax purposes on assets.

Net Advantage to Leasing

The net benefit that results from leasing an asset versus purchasing it outright, considering all financial aspects.

Lease Payments

Periodic payments made by a lessee to a lessor for the use of an asset over a specified time period.

CCA Class

A category used in Canadian tax law that determines the depreciation rate for tax purposes on tangible capital assets.