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  3. allison fitting issued a check for $800. after wri

Allison Fitting issued a check for $800. After writing the check, she had second thoughts...

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Accounting

Allison Fitting issued a check for $800. After writing the check, she had second thoughts and contacted Farmers Mutual Bank (the bank) about the possibility of stopping payment. A bank employee advised Fitting to deliberately create an overdraft situation by withdrawing enough money so there would remain insufficient funds to cover the check in question. The bank employee indicated that in those circumstances the bank would not pay the check. Fitting proceeded to withdraw money from the account, leaving enough money to cover other checks she had written. The bank nevertheless paid the $800 check in question. Is Fitting liable for the overdraft or should the bank have stopped payment?

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