The "Impostor Rule" Is an Exception to the General Rule

question 27

True/False

The "impostor rule" is an exception to the general rule that negotiation of an order instrument requires a valid indorsement by the person to whose order the instrument is payable.

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Definitions:

Normal Balance Side

Normal Balance Side is the side (debit or credit) of an accounting ledger on which increases to the account are recorded, depending on the account type.

Double-Entry Accounting

An accounting method requiring every financial transaction to be recorded in two accounts, one debit and one credit, to keep the accounting equation balanced.

Debits

Accounting entries that increase assets or expenses or decrease liabilities, equity, or revenue, recorded on the left side of an account.

Credits

Entries on the right-hand side of an accounting ledger, indicating increases in liability, equity accounts, and revenue, or a decrease in assets.