Elton Presents an Uncertified Check for Payment More Than Six

question 45

Multiple Choice

Elton presents an uncertified check for payment more than six months after its date. The check was drawn by Dakota on her account in First Community Bank. The usual banking practice in such a case is to

• A) cash the check.
• B) consult the customer.
• C) refuse to cash the check.
• D) ask the payee what he or she would prefer.

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Definitions:

Original Cost

The initial purchase price or cost of acquiring an asset, before any depreciation or amortization.

Accounting Period

A specific period of time in which financial transactions are recorded and financial statements are prepared.

Prepaid Rent Expense

An account representing rent payments made in advance for future periods, which is gradually expensed over the benefit period.

Contra-Asset

An asset account where the balance is expected to be a debit balance but is instead a credit balance, such as accumulated depreciation.