On July 5th, Paul Potter's beginning checking balance is $20 and his account is credited for a deposit of $50. That same day, two checks are posted totaling $75.

Will an overdraft occur if Paul's bank credits deposits before it posts checks? Yes or No?

Will an overdraft occur if Paul's bank posts checks before it credits deposits? Yes or No?

Question

Mathematics

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1 August, 23:38

On July 5th, Paul Potter's beginning checking balance is $20 and his account is credited for a deposit of $50. That same day, two checks are posted totaling $75.

Will an overdraft occur if Paul's bank credits deposits before it posts checks? Yes or No?

Will an overdraft occur if Paul's bank posts checks before it credits deposits? Yes or No?

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Answers (1)

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Liu · Answer 1

The total amount of money in Paul Potter's account after the credited deposit is equal to $70. Then, the checks which total $75 is a negative in his bank account. Therefore, his money fell short of $5. Thus, the answer should be YES.