The Duties of a Drawee Bank Include All of the Following

question 16

Multiple Choice

The duties of a drawee bank include all of the following except to:

• A) maintain security concerning information relating to the depositor-bank relationship.
• B) pay on demand all checks to the extent of the bank's assets.
• C) exercise reasonable care in the payment of checks.
• D) generally refuse to pay any checks after the drawer has died.

---

Definitions:

Margin Of Safety

Margin of safety represents the difference between actual sales and the break-even point, indicating the buffer a company has before it incurs a loss.

Percentage Of Sales

A method or analysis tool that expresses components of a financial statement as a percentage of total sales.

Variable Expense

Costs that fluctuate with the level of production or business activity, such as raw material costs and shipping fees.

Break-Even

Break-even is the point at which total revenues equal total costs, resulting in no net profit or loss, indicating the volume of sales needed to cover costs.