Which of the Following Is Correct with Respect to a Bank

question 35

Multiple Choice

Which of the following is correct with respect to a bank customer's duty to discover and report unauthorized signatures?

• A) The customer is required to exercise reasonable promptness in examining the bank statement.
• B) This duty of examination includes the signatures of payees or indorsers.
• C) The bank is liable on all items with unauthorized signatures even if these canceled checks were returned to the customer four years prior to the discovery of the alterations.
• D) The bank customer must report an unauthorized indorsement within one year of its occurrence.

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Definitions:

Payback Period

The length of time required to recover the cost of an investment or determine how long it takes for an asset to generate enough cash flow to cover its original cost.

Cost Recovery

The process by which an entity regains the capital expenditure of an investment over time, through various methods such as depreciation, amortization, or depletion.

Payback Periods

The length of time required to recover the cost of an investment or project.

Net Cash Flows

The difference between a company's cash inflows and cash outflows during a specific period.