The line of credit against which drafts (checks) can be drawn (written) up to a specified maximum amount is called a/an
A) foreign bond.
B) Discounting.
C) Overdraft.
D) maximum withdrawal.

Question

Quizplus · Accepted Answer

The description matches the definition of an overdraft, which is a type of credit facility provided by banks that allows customers to withdraw more money than what they have in their account up to a specified maximum limit. The drafts (checks) can be drawn (written) against this line of credit, thereby allowing customers to avoid bounced check fees or penalties for insufficient funds. Foreign bond, Discounting, and maximum withdrawal are not relevant to this definition.

The Line of Credit Against Which Drafts (Checks) Can Be