Fact Pattern 19-1

question 59

Multiple Choice

Fact Pattern 19-1
Echo takes her car to Fix-It, Inc., which repairs the car and bills Echo for $500. Echo writes out a check drawn on Capital Bank, but later, believing that Fix-It did not repair the car properly, issues a stop-payment order.
-Refer to Fact Pattern 19-1. Capital Bank pays the check. Capital

• A) can sue Echo for a wrongful stop-payment order.
• B) can sue Fix-It for breach of contract.
• C) can sue no one because it paid a check that was not properly payable.
• D) is liable for Echo's loss due to the wrongful payment.

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Definitions:

Net Cash

Net cash refers to the amount of cash that remains after subtracting a company's total cash outflows from its total cash inflows, indicating the company's liquidity position.

Income Taxes

Charges imposed by the authorities on earnings from companies and individuals within their territory.

Cash Receipts

The collection of money, including coins, currency, checks, and electronic payments, received by a business during a given period.