If the Party That Dishonors an Instrument Is a Collecting

question 38

Multiple Choice

If the party that dishonors an instrument is a collecting bank, when must notice of the dishonor be given to a secondarily liable party by the collecting bank?

• A) Before midnight of the next day
• B) Within 48 hours
• C) Within 7 days
• D) Within 10 days
• E) Within 30 days

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Definitions:

Credit Sales

Sales where the customer is allowed to make payment at a later date, extending credit to the buyer.

Cash Received

The physical or electronic receipt of money from transactions, such as sales, debt collections, or asset disposals.

Total Sales

The total revenue generated from the sale of goods or services before any deductions, such as returns or discounts.

Credit Sales

Sales made by a business that do not require immediate payment, allowing the buyer to pay at a later date.