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WAEC Financial Accounting 2022 Question 5

Question 5

Banking and Bank Reconciliation

Adize gave an instruction to her banker to pay a premium of Le 30,000 from her account to Union Rock Insurance on a quarterly basis for a policy. This instruction is an example of

  1. A.credit transfer
  2. B.direct debit
  3. C.standing order
  4. D.bank charges.
Show the answer and explanation

Answer: C (standing order)

Explanation

A customer's instruction to the bank to pay a fixed sum regularly is a standing order.