Travis signs a check "pay to the order of Umberto" drawn on Travis's account in Valley Bank. Travis has $400 in his account but the amount of the check is $500, which the bank pays. This creates
A)a dishonored check.
B)an overdraft.
C)an oversight.
D)a stale check.

Question

Quizplus · Accepted Answer

An overdraft occurs when a bank allows a customer to withdraw more money than is available in their account, resulting in a negative balance. In this case, Travis's account had $400, but the bank paid a $500 check, creating an overdraft.

Travis Signs a Check "Pay to the Order of Umberto