When the Name of the Payee Is Spelled Incorrectly, the Payee

question 32

Multiple Choice

When the name of the payee is spelled incorrectly, the payee:

• A) must indorse the instrument with the incorrect spelling of the payee's name.
• B) must indorse the instrument with the correct spelling of the payee's name.
• C) may indorse the instrument with either the correct or incorrect spelling of the payee's name.
• D) may not indorse the instrument.

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Definitions:

Service Department

A department that does not directly engage in operating activities; rather, it provides services or assistance to the operating departments.

Equivalent Unit

A measure used in cost accounting to express the amount of work done by an incomplete process on units of production in terms of fully completed units.

Process Costing

A costing methodology used in industries where production is continuous and costs are assigned to units of output through the manufacturing process.

First-In, First-Out

An inventory accounting method where the oldest items (first-in) are sold or used first (first-out), affecting the cost of goods sold and ending inventory valuation.