Question

What is the effect of a payor bank's dishonor of a check?

A) The check is considered valid.
B) The payee is responsible for the dishonor.
C) The payor bank must honor the check upon re-submission.
D) The payee can take legal action against the payor bank.

Answer 1

The effect of a payor bank's dishonor of a check is that the check is considered invalid. The payor bank has the right to dishonor a check if there are insufficient funds in the account of the person who wrote the check. The correct answer is A) The check is considered valid.

Step-by-step explanation:

The effect of a payor bank's dishonor of a check is that the check is considered invalid. The payor bank has the right to dishonor a check if there are insufficient funds in the account of the person who wrote the check. When the payor bank dishonors a check, it means the check cannot be processed and the payee will not receive the funds.The correct answer to this question is A) The check is considered valid.