Diagram the Check-Clearing Process When you deposit your paycheck in your bank, it must

Chapter 17, Problem 34

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Diagram the Check-Clearing Process When you deposit your paycheck in your bank, it must have the check cleared to obtain the funds it credits to your account. Here are the steps that take place. You deposit your check for $250 in Bank ABC. The check was drawn on Bank XYZ, which is located in a different community in your state. Your bank credits your account for $250 and sends the check to the nearest Federal Reserve Bank. The Federal Reserve Bank credits Bank ABCs account for $250 and deducts this amount from Bank XYZs account. The Federal Reserve Bank sends the cancelled check to Bank XYZ, which will draw down your employers checkable deposits by the amount of the check, keep a record of the check and possibly send the cancelled check to your employer. Draw and label a diagram to show this process.