Derby Stables writes a check to Extendo Credit,Inc.,that is drawn on Derby's account at Farm & Ranch Bank.If the bank does not accept the check,liability for its amount is on
A)Derby.
B)Extendo.
C)Farm & Ranch.
D)the holder of the check.

Question

Quizplus · Accepted Answer

The liability for a check lies with the account holder (Derby Stables) if the bank does not accept it. The payee of the check (Extendo Credit, Inc.) can take legal action against Derby Stables to recover the amount if the bank denies the check.

Derby Stables Writes a Check to Extendo Credit,Inc