Tom Indorsed a Check Made Payable to the Order of Tom

question 6

Multiple Choice

Tom indorsed a check made payable to the order of Tom Jones as follows:
Pay Raymond Berry
/s/ Tom Jones
Raymond negotiated the check to his landlord for his rent.Raymond indorsed the check as follows:
Without Recourse
/s/ Raymond Berry

• A)Tom has secondary contractual liability on the check as an indorser.
• B)Tom has no contractual liability on the check because he is the payee.
• C)Tom has primary contractual liability on the check as payee.
• D)Tom eliminated his liability as an indorser by the type of indorsement he used.

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Definitions:

Initial Value Method

An accounting approach where investments are recorded at their cost at the time of acquisition without adjustment for market changes.

Noncontrolling Interest

The portion of equity in a subsidiary not owned by the parent company, reflecting the equity interest of minority shareholders.

Consolidated Income Statement

A consolidated income statement is a financial statement that aggregates the financial performance of a company and its subsidiaries.