BLAW 333 - Ch. 27

Jillian is the holder and payee of the check drawn by Kerri on Laramie Bank. Jillian takes the check to the bank to have it certified. after certification... a. Kerri is discharged on the check b. Kerri is primarily liable on the check c. the bank is discharged on the check d. the bank is secondarily liable on the check

A

Newville Bank mistakenly pays one of Oswald's checks with a forged indorsement. Oswald can recover his loss from the bank if, after receipt of the bank statement, he notifies the bank within 3... a. years b. months c. weeks d. days

A

Salty Snax Company issues a payroll check to Trevor drawn on its account at Unity Bank. This check will be stale if Trevore present it for payment for 6... a. months after it is issued b. months after he indorses c. weeks after he receives it d. weeks after the pay period that it covers

A

Pixie writes a check for $600 drawn on her account at Quest Bank and presents it to Rocco. when Rocco presents the check for payment, the bank dishonors it. Rocco may sue... a. the bank for dishonoring the check b. Pixie on the underlying obligation c. both the bank and Pixie d. none of the above

B

Regine issues a check to Super Discount Store in payment on her account. Tisha, Super Discount's Accountant, forges the store's indorsement and deposits it in her bank account. Urban Bank, Regine's bank, pays the check. Regine can recover from... a. no one b. Tisha, but not Urban Bank c. Urban Bank, which can recover from Tisha d. Urban Bank, which cannot recover from Tisha

C

Devon loses his bank access card. he realizes his loss the next day but waits a week to call Estuary Bank (his bank). Meanwhile, Florida finds and uses Devon's card to withdraw $5,000 from his account. Devon is responsible for... a.$0 b.$50 c.$500 d.$5,000

C customer's liability is up to $500 if bank is not notified within 2 days

hometown bank's cutoff hour is 2 PM. the bank receives a check drawn on the account of Icicle Treats Corporation, one of its customers, at 4 PM Monday, presented by Jaclyn, not a bank customer. the bank uses deferred posting. the bank may timely dishonor the check by midnight... a.Monday b.Tuesday c.Wednesday d.Thursday

C each bank must pass the check on before midnight of the next banking day following receipt. since the check was drawn on Monday after the cutoff hour, it is considered Tuesday, so Wednesday at midnight would be correct.

Koko buys 3 TV sets from Laszlo, paying with a check. when the sets prove defective, Koko orders Metro Bank, the drawee, to stop payment on the check. this order is valid for 14... a. years b. months c. weeks d. days

D

Web Funds, Inc., an e-money issuer, may be subject to the Right to Financial Privacy Act if Web Funds... a. does not accept deposits b. does not hold customer funds, whether or not the funds qualify as "deposits" c. investigates its customers' credit backgrounds d. issues a physical card similar to a debit card

D

fleet national bank pays a check on which has been forged the signature of the drawer, Gunhilde, who is the bank's customer. the bank must re-credit her account for the entire amount of the check if: a. Gunhilde's negligence substantially contributed to the forgery b. the amount of the check was less than $50 c. the amount of the check was more than $5,000 d. the bank's negligence substantially contributed to the forgery

D

T/F a bank's duty to honor its customer's checks is absolute

F

T/F a forged drawer's signature on a check is effective as the signature of the person whose name is signed

F

T/F all funds deposited in all bank accounts must be available for withdrawal no later than the next day

F

T/F if a bank fails to honor a customer's stop-payment order, it may be liable to the customer for more than the amount of the loss suffered by the drawer because of the wrongful payment

F only for the amount of the loss

T/F a bank that fails to investigate an error and report its conclusion promptly to the customer is in violation of the Electronic Fund Transfer Act (EFTA)

T

T/F a bank that pays a customer's check bearing a forged indorsement must re-credit the customer's account

T

T/F a check is a draft drawn on a bank

T

T/F a customer must examine the statements provided by the institution handling his or her account and notify it of any error within sixty days

T

T/F generally, funds must be available on the next business day for cash deposits

T

T/F the rights and duties of a bank and its customers are contractual

T