Future Business Leaders of America (FBLA) Accounting Practice Test

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Prepare for the FBLA Accounting Test with practice quizzes and comprehensive questions. Each question is designed to help deepen your understanding and enhance your readiness for the exam. Are you ready to excel?

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What does the term "drawer" refer to in banking?

The person authorized to cash the check
The bank where the check is deposited
The person who signs a check
The recipient of a check

The correct answer is: The person who signs a check

In banking, the term "drawer" specifically refers to the person who signs a check. This individual is the account holder who is authorizing the bank to release funds from their account to the person or entity that is being paid, known as the payee. The signature is a critical part of this process, as it signifies that the drawer has given their consent for the transaction to occur. Understanding the role of the drawer is essential in accounting and banking because it highlights the responsibilities and rights associated with check writing. The drawer must ensure they have sufficient funds in their account to avoid issues like bounced checks or overdraft fees. This term is integral to discussing checks, payments, and banking transactions, emphasizing the importance of the authorization provided by the drawer through their signature.