Final answer:
A check is essentially a mini contract that enables payment for goods or services with an account holder's signature as authorization. Stores receive funds by depositing the check into their bank account, while plastic money like debit and credit cards provides alternative payment methods.
Step-by-step explanation:
A check is a mini contract, used to pay for goods or services, and is only valid with the account holder's signature, or also known as authorization. Therefore, the correct answer is A) Contract, pay, signature, authorization.
To use a check for payment, you need the aforementioned authorization in the form of a signature. When a store accepts a check as payment, the money is transferred from the payer's bank account to the store's account upon depositing the check. An overdraft occurs when there is insufficient balance in the payer's account to cover the check amount, potentially leading to additional fees unless there is overdraft protection.
Plastic money, such as debit cards, credit cards, and smart cards, fits into this context as they also facilitate payments for goods and services. A debit card functions similarly to a check, instructing the bank to transfer funds directly and immediately from the user's account to the seller. Credit cards offer a short-term loan that is paid back when the statement is settled. Smart cards store a value of money directly on the card for use in purchases.