Which of the following events would cause a bank to debit a depositor's account?
A) The depositor authorizes the bank to charge the depositor's account $50 for new checks.
B) The bank collects a note receivable and related interest on the depositor's behalf.
C) The depositor determines there are outstanding checks drawn on the account at month-end.
D) The depositor determines there are deposits in transit on the account at month-end.
E) The bank determines it incorrectly charged the depositor's account twice for the monthly service charge in a previous month.

Question

Quizplus · Accepted Answer

When the depositor authorizes the bank to charge the account for new checks, it is a request for the bank to remove funds from the account, or debit the account.

The other options: 
B) The bank collecting a note receivable and related interest would result in a credit to the depositor's account (increasing the balance), not a debit. 
C) If the depositor discovers outstanding checks at month-end, this would not result in a debit, but rather a reduction in the balance as the checks clear. 
D) If the bank determines there are deposits in-transit, this would not result in a debit, but rather an increase in the balance once the deposits clear. 
E) If the bank incorrectly charged the account twice, then a credit would be issued to correct the error, not a debit.

Which of the Following Events Would Cause a Bank to Debit