Certified Government Financial Manager (CGFM) Practice Exam 2025 – Your All-in-One Guide to Exam Success!

Question: 1 / 875

What is a check an instrument drawn on?

The treasury of the government

A brokerage account

A bank and paid with funds on deposit

A check is essentially a written order directing a bank to pay a specified amount of money from the account of the person who writes the check (the payer) to another individual or entity (the payee). When a check is presented to the bank, it retrieves the necessary funds from the payer's account, and these funds are then transferred to the payee. Therefore, the description of a check as an instrument that is drawn on a bank and paid with funds on deposit accurately captures the function and nature of a check in financial transactions.

In contrast, the other options do not accurately represent what a check is drawn on. The treasury of the government does not serve as the basis for standard personal or business checks. A brokerage account is meant for trading securities, and a mutual fund represents a pool of investments, neither of which encompasses how checks operate in terms of direct banking transactions.

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A mutual fund

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