If a checking account customer's funds are insufficient to pay all of the items that the bank receives on that account on a given day,the bank may charge the items against the account in any order the bank deems convenient without incurring liability to the customer/drawer for choosing one item over another.

Question

Quizplus · Accepted Answer

This is true as per the terms and conditions of most checking accounts. The bank has the right to choose the order in which to charge items against the account if there are insufficient funds to cover all of them. This is known as the bank's right of setoff.

If a Checking Account Customer's Funds Are Insufficient to Pay