What action does a 'Postdated' check indicate?

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Enhance your knowledge for the CMA exam. Study with flashcards and multiple choice questions, each question has hints and explanations. Prepare thoroughly for your success!

A postdated check is one for which the date written on it is in the future. This means that the check cannot be cashed or deposited until that specified date is reached. The purpose of issuing a postdated check is often to ensure that payment is not made until the payer has sufficient funds available or until a specified obligation is met.

In this context, the other options do not accurately describe a postdated check. Insufficient funds may lead to issues with any check, but it is not a defining characteristic of a postdated check. A voided check has been canceled and cannot be used for payment, while a check that is valid for immediate cashing does not align with the concept of a postdated check since it implies that the check can be cashed right away regardless of the date written on it.

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