Which endorsements does IBC accept?

Which endorsements does IBC accept?

• A. Blank, Restricted, and Special with manager approval.
• B. Only Blank endorsements.
• C. Blank, Restricted, and Special with manager approval.
• D. Restricted and Special with no approval.

Answer: (C)

Endorsements on a check determine who can receive the money and how it can be transferred, and banks implement controls to manage risk. IBC accepts three types: blank endorsements, which simply sign the back of the check and turn it into bearer paper; restricted endorsements, such as “for deposit only,” which limit the check’s use to depositing into the payee’s account; and special endorsements, which authorize payment to a named third party. Because transferring rights to another person increases fraud risk, special endorsements require manager approval. This combination—blank, restricted, and special with manager approval—is why the accepted set is the best choice.

Endorsements on a check determine who can receive the money and how it can be transferred, and banks implement controls to manage risk. IBC accepts three types: blank endorsements, which simply sign the back of the check and turn it into bearer paper; restricted endorsements, such as “for deposit only,” which limit the check’s use to depositing into the payee’s account; and special endorsements, which authorize payment to a named third party. Because transferring rights to another person increases fraud risk, special endorsements require manager approval. This combination—blank, restricted, and special with manager approval—is why the accepted set is the best choice.