Which term is a form of check payment on which the financial institution prints the exact amount covered, often used by people who do not have a checking account?

Which term is a form of check payment on which the financial institution prints the exact amount covered, often used by people who do not have a checking account?

• A. The loss or giving up of something as a penalty for wrongdoing
• B. A form of check payment on which the financial institution prints the exact amount covered, commonly used by people without a checking account
• C. A payment plan that allows payments over time
• D. Money order

Answer: (D)

A money order is a prepaid payment instrument issued by a bank or other financial institution that guarantees the funds. The exact amount is printed on the instrument when it’s issued, making it a form of check-like payment that people without a checking account often use. Because it’s prepaid, the recipient can deposit it with confidence, and the payer avoids the risk of a bounced personal check. Money orders are commonly bought with cash and are widely accepted for payments where a guaranteed form of funds is required, such as bill payments or money transfers. The other options describe concepts that aren’t about a payment instrument: one refers to a penalty or loss, another to a payment plan over time, and this question specifically defines a prepaid, institution-issued payment method.

A money order is a prepaid payment instrument issued by a bank or other financial institution that guarantees the funds. The exact amount is printed on the instrument when it’s issued, making it a form of check-like payment that people without a checking account often use. Because it’s prepaid, the recipient can deposit it with confidence, and the payer avoids the risk of a bounced personal check. Money orders are commonly bought with cash and are widely accepted for payments where a guaranteed form of funds is required, such as bill payments or money transfers.

The other options describe concepts that aren’t about a payment instrument: one refers to a penalty or loss, another to a payment plan over time, and this question specifically defines a prepaid, institution-issued payment method.