Which of the Following Statements Is Correct with Respect to Bonding

question 118

Multiple Choice

Which of the following statements is correct with respect to bonding?

• A) Bonding is another term for insurance. The two terms, bonding and insurance, are interchangeable.
• B) If a person is bonded and that person commits some wrongful act such as stealing a client's money, the bonding company is bound to compensate him for any losses he suffers from being caught.
• C) Bonding provides protection against losses incurred because of fluctuations in the financial markets.
• D) Bonding is a government certification system whereby the government guarantees that a person so bonded or certified will do the job he is hired to do as set out in the bonding certificate.
• E) Bonding provides protection to the victim injured by the wrongful conduct of the person bonded.
• TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.

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Definitions:

Subsidiary Ledgers

Detailed ledgers that break down and provide supporting information for accounts listed in the general ledger.

Subsidiary Posting

A detailed entry process in accounting that involves recording transactions in subsidiary ledgers for a more comprehensive financial tracking.

General Ledger

A comprehensive record of all financial transactions over the life of a company, used to compile financial statements.

Cash Receipts

The accumulation of funds, usually through cash or checks, garnered by a company from its operational activities.