Which of the Following Is Implied When a Bank Certifies

question 4

Multiple Choice

Which of the following is implied when a bank certifies a check?

• A) The bank agrees to accept the check when it is presented for payment.
• B) The bank cashes the check only if the holder himself presents it for payment.
• C) The bank withholds payment on the check until the drawer authorizes payment.
• D) The bank holds the check as guarantee for repayment of a loan taken by a customer.

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Definitions:

Plant Assets

Long-term tangible assets used in the production of goods and services, such as machinery, buildings, and equipment.

Accounting Period

The specific period of time covered by financial statements, typically a year or a quarter, for which all financial transactions are recorded and reported.

Straight-line

A method of depreciation that allocates an equal expense rate to each year of an asset’s useful life.

Accelerated Methods

Depreciation methods that allocate more depreciation expense to the earlier years of an asset's life.