Bus&201 Final Study Set Chapter 20 (Banking)

What is the limit of a customer's liability on their debit card if the loss is reported within 2 days.

$50.00

How many days after a persons death may a bank pay on a check.

10

How many days is a verbal stop payment good for

14

A bank must make funds available for non local checks available within

5 days

A bank is not obligated to pay on a check after

6 months

You must report the loss of your debit card within how long or you might be liable for all use of the card.

60 days

Even if a customer's negligence substantially contributes to a forgery of the drawer's signature on a check, the bank is obliged to re-credit the customer's account for the amount of the check. (T or F)

False

The death of a customer automatically revokes a bank's authority to accept, pay, or collect an item drawn by the customer on an account with the bank. (T or F)

False

When a customer makes a deposit into a checking account, the customer becomes a debtor to the bank for the amount deposited. (T or F)

False

With a joint checking account, the bank can hold any joint-account owner liable for payment of an overdraft even if that owner did not sign the check or benefit from its proceeds. (T or F)

False

Who can be responsible for the amount of a forged check.

Merchant, Bank, Forger, and Customer

A bank must honor a Holder in Due Course because a HDC

Takes the check free of personal defenses

A bank is not obligated to pay an uncertified check presented for payment more than six months from its date. (T or F)

True

A bank must re-credit a customer's account when the bank pays a check on which the drawer's signature is forged.

True

A check may fall under Uniform Commercial Code Article 3 as a negotiable instrument and be subject to UCC Article 4 in the course of collection. (T or F)

True

If a bank's payment over a stop-payment order causes subsequent checks written on the drawer's account to be returned for insufficient funds, the bank will be liable for the drawer's resulting costs. (T or F)

True

If any part of a commercial electronic fund transfer is covered by the Electronic Fund Transfer Act, the entire transaction is excluded from UCC Article 4A. (T or F)

True

If someone steals a check and forges the indorsement, the bank must credit the account for the loss (T or F)

True

To avoid liability for negligence, a customer must examine monthly bank statements and canceled checks promptly and with reasonable care, and report any forged signatures to the bank. (T or F)

True

When a bank certifies a check, the bank is agreeing in advance to accept the check when it is presented for payment and to make payment with funds reserved for the purpose. (T or F)

True

When a bank wrongfully dishonors a check, it is liable to the customer for any resulting damages. (T or F)

True

Franco buys a sofa from Grey at a garage sale. Franco writes Grey a check for $50 to pay for the couch. Grey is

the payee

If a bank repays a customer for a forged indorsement, the bank will be able to recover those funds from whomever they got the check under

warranty