Check Kiting, or Systematically Overdrawing Accounts, Is

question 6

Multiple Choice

Check kiting, or systematically overdrawing accounts, is:

• A) is used by most companies as an ethical means of handling cash reserves.
• B) the process of withdrawing all funds from a bank account as soon as the funds become available.
• C) the central core of a modern cash management system.
• D) is unethical and has mostly been eliminated.
• E) increasingly popular due to recent banking law changes.

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Definitions:

Par Value

A nominal value assigned to share of stock in the charter of a corporation, often used in the calculation of capital accounts.

Stated Value

A nominal value assigned to no-par-value stock by the corporation's board of directors to serve as the base figure for the accounting of the stock.

Stockholders' Equity

The residual interest in the assets of a corporation after debts have been deducted, representing the ownership interest of the shareholders.