Question

A shoe manufacturer, M. Salim has to make a payment to the leather supplier and writes a cheque for a specific amount. This means that the shoe manufacturer instructs his bank to pay this amount to the leather supplier. The leather supplier takes this cheque and deposits it in his own account in the bank. The money is transferred from one bank account to another bank account in a couple of days. The transaction is complete without any payment of cash.

After the transaction between Salim and Prem, ______.

Options

• Salim’s balance in his bank account increases, and Prem’s balance increases.

• Salim’s balance in his bank account decreases and Prem’s balance increases

• Salim’s balance in his bank account increases and Prem’s balance decreases

Answer 1

After the transaction between Salim and Prem, Salim’s balance in his bank account decreases and Prem’s balance increases.