George,John,Paul,Ringo,and Brian Are Five Friends from Iowa

question 27

Multiple Choice

George,John,Paul,Ringo,and Brian are five friends from Iowa.George owes John $100,John owes Paul $200,Paul owes Ringo $300,and Ringo owes Brian $400.John and Paul find a check belonging to George.John names himself as the payee on the check,fills in $200 as the amount,and forges George's signature on it.He indorses the check to Paul and asks him to consider his debt repaid,while keeping the knowledge of the forgery to himself.Paul,in turn,indorses the check to Ringo and pays Ringo the remaining $100 in cash.Ringo indorses the check to Brian,who presents the check to George's bank and receives payment.Who among the following can the bank recover the money from,once the forgery is detected?

• A) George
• B) Paul
• C) Brian
• D) Ringo

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Definitions:

Common Stockholders' Equity

The portion of a company's equity that is attributable to the holders of its common stock.

Leverage

The use of debt to increase the return on an investment.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company uses its assets by calculating the number of times average accounts receivable are collected during a specific period.

Acceleration

The rate at which the velocity of an object changes over time, including increases and decreases in speed or changes in direction.