Categories: Accounting WAEC

This instruction is an example of?

Adiza 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

A. bank charges
B. direct debit
C. standing order
D. credit transfer

Correct Answer:

Option C – standing order

Explanation

Standing order is an instruction given by the account holder to the bank to make regular payment on his behalf. The bank will make the payment and debit the bank statement but no entry in the cash book.

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