BLaw 2 - Ch. 25 Quiz

If a drawer and a payee or holder have accounts at different​ banks, the payer bank and depositary bank are not the same bank. In this​ case, the check is called​ a(n )_____ item.

"on them"

The Federal Reserve System consists of​ _____ regional Federal Reserve banks that assist other banks in the collection of checks.

12

If the same wrongdoer engages in a series of forgeries or alterations on the same​ account, the customer must report that to the payer bank within a reasonable period of​ time, not exceeding​ _____ from the date that the bank statement was made available to the customer.

30 days

Article​ _____ of the Uniform​ _____ Code establishes the requirements for negotiable instruments.

3; Commercial

Article​ _____ of the Uniform​ _____ Code establishes the rules and principles that regulate bank deposit and collection procedures.

4; Commercial

Article​ _____ of the Uniform​ _____ Code establishes rules regulating the creation and collection of and liability for wire transfers.

4a; Commercial

Which of the following is an INCORRECT statement regarding certified​ checks?

A check is a certified check when the bank writes or stamps the word cancelled across the face of an ordinary check. - Correct Statements: ---> When a bank certifies a​ check, it agrees in advance to pay the check from funds set aside from the​ customer's account. ---> Certified checks do not become stall. ---> Certified checks are payable at any time from the date they are issue. ---> When a bank certifies a​ check, it agrees in advance to accept the check when it is presented for payment.

The​ Dodd-Frank Wall Street Reform and Consumer Protection Act created the​ _____.

CFPB

​Richard, who owes Bob​ $500, draws a check payable to Bob on his checking account at City Bank. Richard signs the check but leaves the amount blank. Bob fraudulently fills in​ $1,000 and presents the check to City Bank. Which of the following is​ true?

City Bank can charge​ Richard's account​ $1,000.

Which of the following is an INCORRECT statement regarding​ overdrafts?

If a bank dishonors a​ check, the bank notifies the drawer of the dishonor and returns the check to the​ holder, marked voidable. - correct statements: ---> If the drawer does not have enough money in his or her account when a properly payable check is presented for​ payment, the payer bank can honor the check and create an overdraft in the​ drawer's account. ---> Many banks offer optional expressly​ agreed-upon overdraft protection to their customers. ---> If the bank chooses to pay the check even though there are insufficient funds in the​ drawer's account, it can later charge the​ drawer's account for the amount of the overdraft. ---> If the drawer does not have enough money in his or her account when a properly payable check is presented for​ payment, the payer bank can dishonor the check.

Which of the following is NOT true about Consumer Electronic Funds​ Transfers?

If a customer notifies the issuing bank within two days of learning that a debit card has been lost or​ stolen, the customer is liable for only​ $500 for unauthorized use.

Which of the following is NOT true about bank payment​ rules?

If a drawer and a payee or holder have accounts at different​ banks, the check is called an​ "on us" item.

Which of the following is NOT true about the​ FDIC?

If an​ FDIC-insured bank fails and the insured bank does not have sufficient assets to pay its depositors back their​ money, the U.S. government will pay the depositors all of their lost deposits.

Which of the following is NOT true about the Federal Reserve​ System?

The Federal Reserve banks provide a check clearing system for free to U.S. banks.

Which of the following is NOT true about the collection​ process?

The depository bank may not serve as the payer bank.

Which of the following is an INCORRECT statement regarding​ cashier's checks?

The purchaser must have a checking account at the bank from which the​ cashier's check is purchase. - correct statements: ---> Usually, a specific payee is name. ---> A​ cashier's check is a​ two-party check for which the issuing bank serves as both the drawer and the drawee ---> A person can purchase a​ cashier's check from a bank by paying the bank the amount of the check plus a fee for issuing the check --> A​ cashier's check is a​ two-party check for which the holder serves as payee

Darren Dodgers has a checking account at Big Cheese Bank. Dick Noles steals one of Darren​ Dodgers' checks and completes it by writing in​ $10,000 as the amount of the​ check, adding his name as the​ payee, and forging​ Darren's signature. Dick indorses the check to Dirk​ Dozens, who knows that​ Darren's signature has been forged. Dirk indorses the check to Dean​ Minnow, who is innocent and does not know of the forgery. Dean presents the check to Big Cheese​ Bank, the payer​ bank, which pays the check. Big Cheese Bank​ _____.

can recover from Dick and​ Dirk, but not Dean

A(n) _____ check is a check issued by a bank for which the customer has paid the bank the amount of the check and a fee. The bank guarantees payment of the check.

cashier's

​A(n) _____ check is a type of check for which a bank agrees in advance to accept the check when it is presented for payment.

certified

A bank check is​ a(n) _____ or​ a(n) _____, the payment for which a bank is solely or primarily liable.

certified​ check; cashier's check

Virtual currency is a​ _____________ form of online currency that uses​ _____________ for security. The first major cryptocurrency was​ ______________.

decentralized; cryptography; bitcoin

The​ _____ of a check is a bank on which a check is drawn.

drawee

The​ _____ of a check is the customer who maintains the checking account and writes checks against the account.

drawer

The​ drawer's failure to report a forged or altered check to the bank within​ _____ of receiving the bank statement and canceled checks containing it relieves the bank of any liability for paying the instrument.

one year

In​ March, Sue finds a check from last December in her top desk drawer. This is known as​ a(n) _______.

ordinary check

If a payer bank has paid an altered​ check, it can charge the​ drawer's account for the​ _____ of the check.

original tenor

The​ _____ of a check is the party to whom a check is written.

payee

In​ August, Sue finds a check from last December in her top desk​ drawer, this is known as​ a(n)

stale check

Commercial wire​ transfers, or​ _____ wire​ transfers, are electronic transfers of funds from a bank to another party.

wholesale

If a bank does not honor a check when there are sufficient funds in the​ drawer's account to pay a properly payable​ check, it is liable for​ ______________. The​ _________ bank is liable to the​ __________ for damages proximately caused by the wrongful dishonor as well as for consequential​ damages, damages caused by criminal prosecution.

wrongful​ dishonor; payer; drawer

The Bank Secrecy Act is a federal law that requires financial institutions and other entities to report to the Internal Revenue Service​ (IRS) the receipt of a transaction or series of transactions in an amount greater than​ _____ in cash and suspected criminal activity involving a financial transaction of​ _____ or more in funds.

​$10,000; $1,000