In the Case of a Check, When the Impostor Rule

question 12

Multiple Choice

In the case of a check, when the impostor rule applies:

• A) the drawer of the check can successfully raise the defense of the forged endorsement.
• B) the forged endorsement is effective to negotiate the instrument.
• C) the forged endorsement is ineffective to negotiate the instrument.
• D) the instrument becomes nonnegotiable.

---

Definitions:

Deposits in Transit

Funds that have been recorded by a company but not yet by its bank, typically due to timing differences.

Bank Reconciliation

The process of comparing and adjusting a company's book balance of an account with the balance reported by a bank to find any possible discrepancies.

Company's Books

The complete set of financial records of a business, capturing all transactions, accounting entries, and financial statements.

Payment of a Voucher

The process of settling a voucher, which is a document evidencing a transaction and authorizing payment.