Question

What is it called when banks record which account gives up money and which account receives money when a customer writes a check?


the discount rate


the federal funds rate


check clearing


net worth

Answer 1

The process you are referring to is called **check clearing**. During check clearing, banks record the transfer of funds between the account that gives up money (the account on which the check is drawn) and the account that receives money (the account of the check recipient).