Question

Sylvia deposits in her account at First Bank a $50 check drawn on Valley Bank. First Bank transfers the check to Second Bank, which in turn forwards it to Valley Bank, which pays the item. Valley Bank is the:

A) Paying bank
B) Second Bank
C) Depository bank
D) First Bank

Answer 1

The depository bank in this scenario is Valley Bank.

Step-by-step explanation:

The Depository bank is Valley Bank in this scenario. A depository bank is the bank into which funds are deposited. It receives funds from customers and holds them in checking, savings, or money market accounts. In this case, Sylvia deposited a $50 check into her account at First Bank which transferred the check to Second Bank. Second Bank then forwarded the check to Valley Bank, which paid the item.