Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Types of Receivables

Financial Accounting

7. Receivables and Investments

Types of Receivables

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Multiple Choice

Banks are liable for losses on counterfeit checks in all the following scenarios except:

When the bank pays a check with a forged endorsement without proper verification.

When the customer fails to promptly notify the bank of an unauthorized transaction after receiving the bank statement.

When the bank fails to exercise ordinary care in processing the check.

When the drawer's signature is forged and the bank fails to verify it.

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Verified step by step guidance

Understand the concept of liability for losses on counterfeit checks: Banks are generally liable for losses on counterfeit checks if they fail to exercise ordinary care or proper verification in processing checks.

Analyze the scenarios provided: Each scenario describes a situation where the bank's liability is determined based on its actions or the customer's actions.

Scenario 1: 'When the bank pays a check with a forged endorsement without proper verification' - This indicates the bank's failure to verify the endorsement, making it liable.

Scenario 2: 'When the customer fails to promptly notify the bank of an unauthorized transaction after receiving the bank statement' - This shifts the liability to the customer, as the bank cannot act on unauthorized transactions it is unaware of.

Scenario 3: 'When the bank fails to exercise ordinary care in processing the check' and Scenario 4: 'When the drawer's signature is forged and the bank fails to verify it' - Both scenarios involve the bank's failure to act responsibly, making it liable. Therefore, the exception is Scenario 2, where the customer fails to notify the bank promptly.