Highland Bakery Inc.has forwarded a cheque to Prairie Flour Mills Ltd.to pay Prairie's invoice for the flour it recently delivered.Prairie will deposit the cheque into its account upon receipt.How will the actual cash payment represented by the cheque be credited to the Prairie Flour Mills' account?

Question

Quizplus · Accepted Answer

The actual cash payment represented by the cheque will be credited to the Prairie Flour Mills' account through the bank centralized clearing process, where the cheque will go through a series of steps to make sure that Highland Bakery Inc. has sufficient funds to cover the cheque and that the cheque is not fraudulent before the funds are transferred to Prairie Flour Mills' account. Other options are not relevant to the process of cheque clearance.