Future Business Leaders of America (FBLA) Accounting Practice Test

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Prepare for the FBLA Accounting Test with practice quizzes and comprehensive questions. Each question is designed to help deepen your understanding and enhance your readiness for the exam. Are you ready to excel?

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What is an NSF check?

A check that has been lost in the mail
A check returned for insufficient funds
A check that is mistakenly written
A check that is older than 6 months

The correct answer is: A check returned for insufficient funds

An NSF check refers to a check that has been returned because the account holder does not have enough funds available to cover the amount of the check when it is presented for payment. This term stands for "Non-Sufficient Funds." When someone writes a check without having enough money in their bank account to ensure it can be cashed, the bank will return that check to the payee, indicating that there are insufficient funds. This situation can trigger fees not only for the person who wrote the check but potentially also for the recipient if they attempt to deposit or cash a check that bounces. Understanding the implications of NSF checks is crucial for both personal and business financial management, as it relates to maintaining healthy cash flow and ensuring that transactions are honored.