Issuing a cashier’s check is best described as a banking activity involving:

• A. Stopping a payment
• B. Depositing a check
• C. Issuing a guaranteed funds check payable to a third party
• D. Endorsing a check

Answer: (C)

Issuing a cashier’s check involves the bank guaranteeing funds to a recipient. When the bank issues this type of check, it withdraws the funds from its own resources and promises to pay the named payee the specified amount. That guaranteed funds aspect is why it’s described as a guaranteed funds check payable to a third party—the bank stands behind the payment, not the purchaser’s personal account.

This differs from stopping a payment (which would cancel or prevent payment on a check), depositing a check (which adds funds to an account), or endorsing a check (which transfers ownership by signing the back).