Barry Presents to Wake Bank for Deposit in His Account

question 10

Multiple Choice

Barry presents to Wake Bank for deposit in his account a check for $100 made out to him by Richard. Wake Bank provisionally credits Barry's account on Monday. When is payment final?

• A) Automatically at the end of the third business day.
• B) Midnight Tuesday.
• C) When the amount of the check is collected from Richard's bank.
• D) When Richard's bank receives the check.

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Definitions:

Discount Period

The time frame within which a buyer can pay less than the full amount due on an invoice if payment is made promptly, often to encourage early payment.

Credit Terms

Conditions under which credit is extended by a lender to a borrower, including the repayment timetable, interest rate, and any other requirements.

Periodic Inventory Method

An inventory accounting method where the inventory balance is updated at specific intervals rather than after each purchase or sale.

Accounts Payable

Liabilities owed by a business to its suppliers or creditors for goods and services received but not yet paid for.