Why will a cheque be dishonoured?

A. Regular signature
B. high amount of money written on the cheque
C. insufficient funds
D. general crossing

Correct Answer:

Option C – insufficient funds

Explanation

What is a Dishonored Cheque? A cheque is said to be honoured, if the banks give the amount to the payee. While, if the bank refuses to pay the amount to the payee, the cheque is said to be dishonoured. In other words, dishonor of cheque is a condition in which bank refuses to pay the amount of cheque to the payee. The cheque should have been returned or dishonoured because of insufficient funds in the drawer’s account

insufficient funds in the account is a major reason for dishonouring a cheque