If a Bank Uses a Substitute Check,it Makes Which of the Following

question 21

Multiple Choice

If a bank uses a substitute check,it makes which of the following warranties?

• A)It is not a legal equivalent of the original check.
• B)It contains an accurate image of the front and back of the original check.
• C)The drawer,indorser,or the depositary bank will be asked to pay a check that has already been paid.
• D)Original checks have to be presented to the drawee bank for payment.

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Definitions:

Operating Cycle

The time period it takes for a company to purchase inventory, sell it, and convert the sale into cash.

Merchandising Company

A company that purchases and sells tangible inventory to customers without changing its form.

Service Company

A business entity that provides intangible products or services to consumers or other businesses.

FOB Shipping Point

A term used in shipping that indicates that the buyer is responsible for the cost and risk of transport as soon as the goods are loaded onto the shipping vehicle.