Gary Writes a Check Drawn on Hilltop Bank for $400

question 40

Multiple Choice

Gary writes a check drawn on Hilltop Bank for $400 "payable to Ivan" on May 1. Gary dies on May 3. Ivan presents the check to the bank on May 5. Unaware of Gary's death, the bank​

• A) ​must certify the check.
• B) ​may pay the check.
• C) ​must consult with Gary's heirs before paying the check.
• D) ​can do nothing until Ivan claims an interest in the account.

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Definitions:

Recording

The process of entering financial transactions and other information related to business operations into the accounting system.

Owner's Equity

After settling all obligations, the balance of an entity's assets stands as a representation of the shareholder or owner's equity.

Additional Investments

Funds or assets that an investor or business owner contributes to a business beyond the initial investment, to support operations or expansion.

Net Loss

The amount by which total expenses exceed total revenues in a given period, indicating financial loss.