Which of the Following Is True for a Stop-Payment Order

question 27

Multiple Choice

Which of the following is true for a stop-payment order to be effective?

• A)The order can come up to an hour after the check has been honored.
• B)The bank must receive the order in a way that gives the bank a reasonable opportunity to act.
• C)The bank can receive the order after it has certified the check.
• D)The order must be in a written format for the bank to be able to recognize it as the check corresponding to the stop-payment order.

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Definitions:

Aggressive Working Capital Policy

A strategy emphasizing minimal cash and inventory levels and maximizing short-term liabilities to fund operations and investments.

Permanent Working Capital

Permanent Working Capital is the minimum amount of capital that a company needs to operate effectively and continuously over the long term.

Financing Current Assets

The process of obtaining funds to cover short-term operational needs such as inventory, accounts receivable, and day-to-day expenses.

Short-Term Debt

Borrowings and obligations payable within one year, often used to meet immediate financing needs or manage cash flow efficiently.