Conversion of an Instrument

question 32

Multiple Choice

Conversion of an instrument:

• A) is an authorized assumption and exercise of ownership over it.
• B) may occur if a person pays an instrument on a forged indorsement.
• C) differs from conversion of personal property with respect to the applicable laws.
• D) occurs if it does not lack indorsement necessary for negotiation.

---

Definitions:

Direct Method

A cost allocation method that assigns service departments’ costs directly to producing departments without any intermediate steps.

Support Department Costs

Expenses incurred by service departments within a company that do not directly contribute to making a product but are necessary for the business to operate.

Assembly Department

A section within a manufacturing facility where components are assembled into final products, often involving both human labor and machinery.

Direct Method

A costing method that directly allocates service department costs to producing departments without apportioning them among the service departments themselves.