O'Shea issues a check drawn on Prime Bank to Quality Equipment Supply to pay for a backhoe.Later,O'Shea discovers a defect in the backhoe and orders the bank to stop payment on the check.O'Shea does not renew the order,and the bank clears the check eight months later.The bank
A) must recredit O'Shea's account.
B) must obtain funds from Quality Equipment to cover the amount of the check.
C) must substitute acceptable goods.
D) need not recredit O'Shea's account.

Question

O'Shea issues a check drawn on Prime Bank to Quality Equipment Supply to pay for a backhoe.Later,O'Shea discovers a defect in the backhoe and orders the bank to stop payment on the check.O'Shea does not renew the order,and the bank clears the check eight months later.The bank​ 
A) ​must recredit O'Shea's account. 
B) ​must obtain funds from Quality Equipment to cover the amount of the check. 
C) ​must substitute acceptable goods. 
D) ​need not recredit O'Shea's account.

Quizplus · Accepted Answer

Once a check has been cleared by the bank, they are released from any further responsibility. In this case, O'Shea ordered the bank to stop payment on the check, but did not renew the order, so the bank cleared the check after eight months. As a result, the bank does not need to recredit O'Shea's account.

O'Shea Issues a Check Drawn on Prime Bank to Quality