A check returned by a bank because the issuer's cash account balance could not cover the check is called a(n):
a. Cancelled check
b. Certified check
c. Outstanding check
d. NSF check
d. NSF check
The correct answer is d. NSF check, which stands for "non-sufficient funds" check.
To derive this answer, we can break down the different options and identify the one that best fits the given description.
a. Cancelled check: A cancelled check refers to a check that has already been cashed or cleared by the bank. It is not related to insufficient funds.
b. Certified check: A certified check is a guaranteed form of payment where the bank sets aside funds from the issuer's account to cover the check. This type of check would not be returned due to insufficient funds.
c. Outstanding check: An outstanding check is a check that has been written but not yet presented to the bank for payment. It is unrelated to insufficient funds.
d. NSF check: An NSF check, as mentioned earlier, is a check that is returned by the bank because the issuer's cash account balance is insufficient to cover the check. This is the correct answer.
Therefore, the correct choice is d. NSF check.