Shirlene Has Been Declared Incompetent by a Court

question 26

Multiple Choice

Shirlene has been declared incompetent by a court.Her bank:

• A)may continue to pay her checks until it has received notice that a court has determined her to be incompetent.
• B)must itself make a determination of her competence.
• C)is not liable if it pays her checks since it has contractual obligations to pay her checks as long as she has an account and there are sufficient funds in the account to cover the checks.
• D)is liable only for reasonable check amounts written by Shirlene.

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Definitions:

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and profits without increasing its financial leverage or debt.

Net Income

Represents the company's total earnings, reflecting the company's profit after all costs and taxes have been subtracted from revenues.

Cash Dividends Paid

The total amount of cash distributed by a company to its shareholders as dividends during a specific period.

Retention Ratio

The share of net income that remains in the business instead of being paid out to shareholders in the form of dividends.