Which of the Following Is Correct with Respect to a Bank

question 58

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 care and promptness to examine the bank statement.
• B) A customer's duty of examination includes checking 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 is not required to exercise ordinary care in paying the items.

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Definitions:

Manufacturing Overhead

All indirect costs associated with the manufacturing process, such as factory rent, utilities, and salaries of indirect labor.

Activity-Based Costing

A method of costing that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption.

Batch Setup

Batch setup refers to the process and the activities involved in preparing equipment or a production area for manufacturing a specific batch of products.

Activity Rate

The cost driver rate used in activity-based costing to allocate costs to products or services based on their consumption of activities.