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 is the effect of a blank endorsement on a check?

It transfers ownership to anyone holding the check
It makes the check void
It adds security to the check
It restricts the check from being cashed

The correct answer is: It transfers ownership to anyone holding the check

A blank endorsement on a check allows for the transfer of ownership to anyone who is currently in possession of the check. When a payee simply signs their name on the back of the check without specifying a new recipient, that endorsement permits anyone who holds the check to cash or deposit it. This is why a blank endorsement is considered a more flexible but less secure way to endorse a check compared to other types of endorsements that name specific individuals or accounts. While blank endorsements facilitate the transfer of ownership, they also increase the risk of loss if the check is lost or stolen, as anyone can cash it. Other options do not accurately describe the function of a blank endorsement, which is solely to allow for open transferability.