Which of the Following Is True of the Drawer-Drawee Relationship

question 77

Multiple Choice

Which of the following is true of the drawer-drawee relationship?

• A)The drawer becomes the creditor when the drawee bank pays more than the drawer has on deposit.
• B)The drawer becomes a debtor and the drawee bank becomes the creditor at the time of opening a checking account.
• C)The drawer becomes the insured and the drawee bank becomes the insurer at the time of opening a checking account.
• D)The drawer becomes the creditor and the drawee bank becomes the debtor at the time of opening an account.

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Definitions:

Property Plant and Equipment

Long-term tangible assets held for business use and not expected to be converted to cash in the upcoming year.

Total Assets

The sum of all resources owned by a company as reflected on the balance sheet, including both current and non-current assets.

Accumulated Depreciation

Accumulated depreciation represents the total depreciation expense assigned to a fixed asset over its useful life, reducing its book value.

Investments

Assets purchased with the expectation that they will generate income or appreciate in the future.