When a fiRm Writes a Cheque, There Is an Immediate

question 25

Multiple Choice

When a firm writes a cheque, there is an immediate decrease in _____ cash, but no immediate change in _____ cash.

• A)bank; collected
• B)ledger; book
• C)bank; ledger
• D)book; bank
• E)None of the above

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Definitions:

Close Corporation

A type of corporation that is often privately held and has a small number of shareholders. The corporate stock is not publicly traded and is subject to greater restrictions on its transferability.

Minority Shareholders

Investors who own less than 50% of a company's shares, and typically have limited influence over company decisions.

State Corporate Statutes

Laws enacted by states governing the formation, operation, and dissolution of corporations within that state.

Fiduciary Duty

An obligation to act in the best interest of another party, such as the relationship between a trustee and the beneficiaries of the trust.