Future Business Leaders of America (FBLA) Accounting Practice Test

What can be inferred about checks with future dates?

1. They can be cashed immediately

2. They are considered postdated checks

3. They typically require bank approval

4. They are not valid for transactions

The correct answer is: They are considered postdated checks

Checks with future dates are indeed referred to as postdated checks. A postdated check is one that is written with a date that is later than the current date and, as such, cannot be cashed or deposited until that specified date. This means that if a check is dated for a future date, the recipient has to wait until that date arrives to process the check. This practice can be important for both the issuer and the payee for various reasons, such as ensuring that funds are available at the time of cashing or managing cash flow. It is important to understand that while a check may be postdated, it can still be presented for payment before the date, but the bank could choose not to honor it until the due date. The other options do not accurately represent the nature of checks with future dates. They cannot be cashed immediately due to their future date, they do not necessarily require bank approval just because they are postdated, and while they may not be valid for transactions until their date, they are still considered valid legal instruments once the date arrives.