Question

Oh no! You bounced a check. You must pay _____________, fill in the blank, to the business you wrote the original check to.

1. Overdraft charge
2. Interest
3. Twice the original amount
4. Bank fees

Answer 1

When a check bounces, you have to pay bank fees to the business. Overdraft occurs when you spend more than your account balance. Regularly balancing your checkbook can prevent overdraft fees.

Step-by-step explanation:

If you bounce a check, you must pay bank fees to the business you wrote the original check to. When using a check for payment for goods and services, you ensure that the store can claim the amount by depositing the check at their bank, which will then transfer the funds from your account to the store's account. If your account does not have sufficient funds, overdraft occurs. An overdraft is when you spend more money than you have in your account, leading to additional charges from the bank. To avoid such situations, it's important to manage your finances wisely and balance your checkbook regularly, being aware of all the entries and the actual balance to prevent overdraft and associated fees.