Kobe Signs a Check "Pay to the Order of Liu

question 54

Multiple Choice

Kobe signs a check "pay to the order of Liu" drawn on Kobe's account at Main Street Bank. He later orders the bank not to pay the check, but the bank pays it over his order. Subsequent checks written on the account "bounce." Most likely liable for the costs to Kobe is

• A)any party to whom a subsequent check was written.
• B)Kobe.
• C)Liu.
• D)Main Street Bank.

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Definitions:

Pre-tax Effect

The impact of an event or transaction on a company's financials before taking into account the effects of income tax.

Units

A measurement or quantity of something, often used in the context of production, sales, or inventory.

LIFO Liquidation

A situation where older inventory, costed at historical prices, is sold, possibly resulting in higher reported profits due to inflation.

Pre-tax Effect

The impact on financial results before the adjustment for taxes has been made.