In the Case of a Bank That Refuses to Pay

question 42

Multiple Choice

In the case of a bank that refuses to pay on a check drawn against an account with sufficient funds,which of the following actual damages would the bank be liable for?

• A)Charges imposed by retailers for returned checks.
• B)Damages for mental disturbance.
• C)Injury to the depositor's credit rating that result from the dishonor.
• D)Only damages for mental disturbance and injury to honor.

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Definitions:

Interest-Bearing Note

A debt instrument that pays interest at a predetermined rate to the holder, typically issued in exchange for a loan or credit extended to the borrower.

Maturity Value

The amount that is due at the maturity or due date of a note.

Interest Rate

The percentage of a sum of money charged for its use, often expressed as an annual percentage rate.

Allowance Method

An accounting technique that estimates and sets aside a portion of accounts receivable which may not be collectible.