A Bank Is Within Its Rights to Ask a Customer

question 16

Multiple Choice

A bank is within its rights to ask a customer to sign a form to:

• A)disclaim its responsibility to act in good faith.
• B)limit its liability for a stop-payment order or damages if it fails to obey the order.
• C)disclaim its duty to exercise ordinary care in paying a check over a stop-payment order.
• D)limit its liability for negligence.

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Definitions:

Equity Method

An accounting technique used to record investments in other companies, where the investment's value is adjusted based on the investor's share of the investee's profit or loss.

Acquisition Differential

The difference between the cost of acquiring a company and the sum of the fair market values of the identifiable assets acquired minus liabilities assumed.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and adjusted thereafter for the investor's share of the investee's net income or loss.

Patents

Intellectual property rights granted to an inventor, providing exclusive rights to use, sell, or manufacture the invention for a certain period.