Which of the Following Must Occur for a Drawer to Become

question 65

Multiple Choice

Which of the following must occur for a drawer to become liable on an instrument?

• A) The holder of the instrument must present the instrument in a proper and timely fashion.
• B) The instrument must be dishonored.
• C) Notice of the dishonor must be given to the drawer.
• D) The holder of the instrument must present the instrument in a proper and timely fashion, the instrument must be dishonored, and notice of the dishonor must be given to the drawer.
• E) The holder of the instrument must present the instrument in a proper and timely fashion and the instrument must be dishonored, but there is no requirement of notice of dishonor since the injured party may proceed directly to court.

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Definitions:

Direct Method

An approach in accounting that allocates service department costs directly to producing departments without considering service departments' interrelations.

Operating Activities

Transactions and other events related to the primary operations of a business, such as selling products or services.

Indirect Method

A technique used in cash flow statement preparation that starts with net income and adjusts for changes in balance sheet accounts to arrive at cash flow from operating activities.

Cash Flows

The total amount of money being transferred in and out of a business, especially as affecting liquidity.