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 type of endorsement allows for a specific transaction to be outlined?

Blank endorsement
Restrictive endorsement
Special endorsement
General endorsement

The correct answer is: Special endorsement

A special endorsement is used when a specific transaction needs to be clearly defined, particularly when transferring a check to another party. This type of endorsement includes the signature of the endorser and specifies the name of the person or entity to whom the check is payable. For instance, if you receive a check made out to you, and you want to endorse it over to a friend, you would write your signature along with your friend's name on the back of the check, thus creating a special endorsement. This endorsement type is crucial in situations where it’s important to trace the transaction or ensure that a check can only be deposited by the person mentioned, adding a layer of security. Special endorsements are widely used in business and personal transactions to maintain clarity and control over the movement of funds.