Which of the Following Is True of the Obligations of an Acceptor

question 49

Multiple Choice

Which of the following is true of the obligations of an acceptor?

• A) If the certification or acceptance does not state an amount, then the acceptor is free of all obligations.
• B) If the certification of a check or other acceptance of a draft states the amount accepted, the obligation of the acceptor is the amount of the instrument at the time a holder in due course takes it.
• C) If the certification of a check or other acceptance of a draft states the amount certified or accepted, the obligation of the acceptor is that amount.
• D) If the certification or acceptance does not state an amount, or if the amount of the instrument is subsequently raised, then the obligation of the acceptor is the raised amount.

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Definitions:

Plant and Equipment

Plant and equipment are tangible assets used in the production or supply of goods and services, such as machinery, vehicles, and buildings, necessary for business operations.

Accumulated Depreciation

Sum of all depreciation expenses allocated to a fixed asset since it first became operational.

Mortgage Payable

A liability account showing amount owed on a mortgage.

Liquidity

A measure of the ease with which an asset can be converted into cash without significant loss in value.