Which of the following corresponds with the term 'signature authority'?

The term 'signature authority' refers to the specific limits placed on an individual's ability to approve transactions. This authority is determined by one's designated role within the organization and the responsibilities associated with that position. When someone has signature authority, they have a defined scope of transactions for which they can provide approval, ensuring that there is oversight and control over financial activities.

The correct choice emphasizes that signature authority comes with limits that are based on the approval authority assigned to an individual. This means that an employee can only approve transactions up to a certain dollar amount or type, which aligns with their responsibilities and the trust placed in them by the organization.

In this context, it’s important to understand how signature authority is structured within a financial institution. For example, a bank may designate different levels of approval for various types of transactions to ensure that high-value transactions receive adequate scrutiny and oversight. This prevents possible fraud or errors by ensuring that no single individual has unchecked power over financial decisions.