BLE Test 3.12.19
Mary writes a check drawn on County Bank for $400 "payable to Bill" on May 1. Mary dies on May 3. Bill presents the check to County Bank on May 5. County Bank a. may not pay the check. b. may pay the check. c. must consult with Mary's heirs before paying the check. d. must read Mary's will before paying the check.
B
Roald writes a check for $700 to Savannah. Savannah indorses the check in blank and transfers it to Twitchell, who alters the check to read $7,000 and presents it to Union Bank, the drawee, for payment. The bank cashes it. Roald discovers the alter¬ation and files a suit against the bank. Roald can recover a. $7,000. b. $6,300. c. $700. d. 0.
B
Scott presents an instrument that states "pay to the order of Scott" to Town Bank for payment. This instrument is the most common type of negotiable instrument, which is a. a commercial wire transfer. b. a check. c. a note. d. a substitute check.
B
Jacob writes Phillip an uncertified check for $500 on January 1. Seven months later, Phillip presents the check at the bank. The bank pays the check in good faith without consulting Jacob. The bank a. does not have the right to charge Jacob's account for $500. b. only has the right to charge Jacob's account for $250. c. has the right to charge Jacob's account for $500. d. can be held liable for breach of contract.
C
On Monday, Michelle deposits in her account at Fiscal Bank a local check for $500. After 5:00 P.M. on Friday, from these funds, Michelle can withdraw no more than a. $100. b. $400. c. $500. d. $600.
C
Rikki signs a check "pay to the order of Scholar University" drawn on Rikki's account in Town Bank to pay her tuition. Rikki is a. the certifier. b. the drawee. c. the drawer. d. the payee.
C
Simon signs a check "pay to the order of Tilly" drawn on Simon's account in United Bank. Vela forges Tilly's indorsement, First Federal Bank cashes the check, and Vela disappears. United pays First Federal and debits Simon's account. Most likely, the ultimate loss will fall on a. Simon. b. Trudy. c. United Bank. d. First Federal Bank.
C
Valley Bank retains the cancelled checks of its customers. Valley must be able to provide customers with legible copies of checks paid for a. one year. b. five years. c. seven years. d. nine years.
C
Albert buys a surround sound system from his neighbor George at George's garage sale. Albert writes George a check for $250 for the sound system. George is a. the certifier. b. the drawee. c. the drawer. d. the payee.
D
Brandy forges Caleb's signature on a check "payable to the order of Brandy" drawn on Caleb's account in Downtown Bank. Caleb's forged signature is a. effective if an innocent third party accepts the check. b. effective to the degree that it matches Caleb's genuine signature. c. effective to the extent that Downtown Bank debits Caleb's account. d. not effective.
D
Shakira issues a check drawn on Thrifty Bank to Ranch & Farm Supply to pay for a rototiller. Later, Shakira discovers a defect in the device and orders Thrifty to stop payment on the check. Shakira does not renew the order, and the bank clears the check eight months later. The bank a. must recredit Shakira's account. b. must obtain funds from Ranch & Farm to cover the check. c. must substitute acceptable goods. d. need not recredit Shakira's account.
D
Trudy forges Uma's signature on a check "payable to the order of Trudy" drawn on Uma's account in Verity Bank. Most likely, if the bank pays the check a. the Federal Reserve will reimburse all parties for their costs. b. the loss will be apportioned among all of Verity's customers. c. Uma will be liable for the amount. d. Verity will have to recredit Uma's account.
D
When processing a check, Superior Bank encodes information, such as the amount of the check, on the item. Superior thereby warrants to any subsequent bank or payor a.the item has been returned to the drawer. b.nothing. c.the check has been processed manually. d.the encoded information is correct.
D
A bank has no right to charge a customer's account for the amount of a stale check
F
A bank is not obligated to pay an uncertified check presented less than six months from its date.
F
A bank is not responsible for determining whether a signature on a customer's check is genuine.
F
A bank may not pay any checks on a customer's account after the date of the customer's death.
F
A bank that pays a customer's check with a forged drawer's signature can generally pass the loss onto the customer.
F
A certified check is a check that has been signed by a notary public.
F
A customer has a right to stop payment on a check that has been certified or accepted by a bank.
F
If a customer does not have sufficient funds to pay a check available in his or her checking account and the bank dishonors the check, the bank is liable to the customer.
F
A point-of-sale system is a type of electronic fund transfer system.
T
An oral stop payment order is valid for fourteen days.
T
Gaining unauthorized access to an electronic fund transfer system is a felony.
T
Stored-value cards are a form of digital cash
T
The Federal Reserve System acts as a clearinghouse where banks exchange checks.
T
The Uniform Commercial Code governs checks.
T
The first bank to receive a check for payment is the depositary bank.
T
The rights and duties of a bank and its customer are contractual.
T
Under the Check Clearing in the 21st Century Act, a bank has to credit a customer's account as soon as the bank receives the funds.
T
A forged signature is effective as the signature of a drawer to the extent that is resembles the drawer's actual signature.
F
A written stop payment order is valid for only thirty days.
F
Commercial banking practices consider a check that has been outstanding for three months to be a stale check.
F
Each bank in a collection chain must pass a check on before noon of the day of its receipt.
F
If a customer's debit card is lost or stolen, the customer will not be liable for any unauthorized use of the card.
F
The incompetence of a customer revokes a bank's authority to pay an item.
F
Today, most checks are processed manually
F
When a customer deposits cash into a checking account, he or she becomes a debtor for the amount deposited.
F
Elmo pays First National Bank $1,000 plus a service fee to draw a check on itself made payable to Go Delivery Service. This is a. a cashier's check. b. an overdraft. c. a stale check. d. a stop-payment order.
A
Jackie inserts a debit card issued by her bank into a machine and keys in her personal identification number. She is then able to withdraw $500 in cash. Jackie is using a. an automated teller machine. b. a point-of-sale system. c. a direct deposit system. d. an Internet payment system.
A
Jon writes a check to LocoMotion, Inc., as payment for a golf cart but soon discovers the cart is broken. He goes to Fairway Bank, the drawee, and orally authorizes Lolly, a bank officer, to stop payment on the check. This order is valid for a. fourteen days. b. fourteen months. c. fourteen attempts to cash it. d. fourteen subsequent "on-us" items.
A
Luc writes a check for $1,000 drawn on Ridgetop Bank and presents it to Bianca. Bianca presents the check for payment to Ridgetop Bank, which dis-hon¬ors it for insufficient funds. The party most likely liable to Bianca is a. Luc in a civil suit. b. Luc in a criminal prosecution. c. Ridgetop Bank in an administrative proceeding. d. neither Luc nor Ridgetop Bank.
A
Daria writes a check for $100 drawn on Village Bank and presents it to Fast Cash, Inc., for payment. If the check is not backed by sufficient funds, Daria may be prosecuted for a. forgery. b. fraud. c. negligence. d. nothing.
B
Echo takes her car to Fix-It, Inc., which repairs the car and bills Echo for $500. Echo writes out a check drawn on Capital Bank, but later, believing that Fix-It did not repair the car properly, issues a stop-payment order. Refer to Fact Pattern 19-1. Capital Bank a. is liable to Fix-It for the amount of the check. b. must stop payment if Capital has a reasonable time to act. c. need not stop payment unless Echo had a valid reason to act. d. need not follow Echo's order unless the check was certified.
B
Elton presents an uncertified check for payment more than six months after its date. The check was drawn by Dakota on her account in First Community Bank. The usual banking practice in such a case is to a. cash the check. b. consult the customer. c. refuse to cash the check. d. ask the payee what he or she would prefer.
B
Fact Pattern 19-2 (Questions 30-31 apply) Tom draws a check, on his account in State Bank in New York, payable to Digital Media, Inc., in San Francisco. Digital deposits the check in its ac¬count at First National Bank. Refer to Fact Pattern 19-2. Digital's bank is a. the cashing bank. b. the depositary bank. c. the intermediary bank. d. the payor bank.
B
Ian buys a cell phone in Jiffy Mart, using the means that accounts for more retail payments than any other. This means of payment is a. a commercial check. b. a debit card. c. a personal check. d. a cash.
B
Jen signs a check "pay to the order of Key" drawn on Jen's account in Little Bank to buy Key's car. If there are insufficient funds in Jen's account to cover the amount of the check, but the bank pays it, this creates a. a cashier's check. b. an overdraft. c. a stale check. d. a stop-payment order.
B
Julia opens a checking account with Washington Bank and deposits funds into the account. Julia and Washington Bank a. do not have a contractual relationship. b. have a creditor-debtor relationship in which Julia is the creditor and Washington Bank is the debtor. c. have a creditor-debtor relationship in which Washington Bank is the creditor and Julia bank is the debtor. d. do not have a creditor-debtor relationship.
B
Kris presents an instrument that states "pay to the order of Kris" to Metro Bank for payment. This is a special type of draft drawn on a bank, ordering the bank to pay a fixed amount of money on demand. This is a. a commercial wire transfer. b. a check. c. a debit card transaction receipt. d. a cash transaction
B
Martha has a checking account with Homeplace Bank. Martha signs a check "payable to Phillipa" drawn on Martha's account. Homeplace Bank is a. the payer. b. the drawee. c. the drawer. d. the payee.
B
A check is not a substitute for cash.
F
Brendan signs a check "pay to the order of City College Bookstore" drawn on his account in Delta Bank to pay for his current semester's textbooks. The bookstore deposits the check in its account in Eagle Bank. Like most checks, this check is a. a one-party instrument. b. a nonnegotiable instrument. c. a special type of draft. d. not a substitute for cash.
C
Clyde issues a check payable to Discount Mart. Elle, Discount's cashier, forges the store's indorsement and deposits the check in her bank ac¬count. Clyde's bank, Main Street Bank, pays the check. Clyde can recover from a. Elle, but not Main Street Bank. b. Main Street Bank, which cannot recover from Elle. c. Main Street Bank, which can recover from Elle. d. no one.
C
Dru signs a check "pay to the order of Eppie" drawn on Dru's account in Bayside Bank. Greta forges Eppie's indorsement. Bayside pays the check. Most likely a. Dru will be liable for the amount. b. Eppie will have to pay Dru for the amount. c. Bayside will have to recredit Dru's account. d. the Federal Reserve will reimburse all parties for their costs.
C
Ellen pays State Bank $500 plus a service fee to draw a check on itself payable to Paul's Plumbing. Which of the following parties is responsible for paying the check? a. Only Ellen b. Both Ellen and State Bank c. Only State Bank d. None of the parties
C
Dhani signs a check "pay to the order of Etan" drawn on Dhani's account in First State Bank and dates the check "May 1." Etan presents the check to the bank for payment on December 15. This is a. a cashier's check. b. an overdraft. c. a certified check. d. a stale check.
D
Echo takes her car to Fix-It, Inc., which repairs the car and bills Echo for $500. Echo writes out a check drawn on Capital Bank, but later, believing that Fix-It did not repair the car properly, issues a stop-payment order. 19. Refer to Fact Pattern 19-1. Capital Bank pays the check. Capital a. can sue Echo for a wrongful stop-payment order. b. can sue Fix-It for breach of contract. c. can sue no one because it paid a check that was not properly payable. d. is liable for Echo's loss due to the wrongful payment.
D
Fact Pattern 19-2 (Questions 30-31 apply) Tom draws a check, on his account in State Bank in New York, payable to Digital Media, Inc., in San Francisco. Digital deposits the check in its ac¬count at First National Bank. Refer to Fact Pattern 19-2. Tom's bank is a. the cashing bank. b. the depositary bank. c. the intermediary bank. d. the payor bank.
D
Finance Bank receives a check drawn on the account of Get-Rich Industries, Inc., one of the bank's customers, at 3 P.M. Friday. Hildy, the pre¬senter of the check, is not one of the bank's customers. The bank uses de¬ferred posting with a 2 P.M. cutoff hour. If it decides to dis¬honor the check, it must do so by midnight a. Saturday. b. Sunday. c. Monday. d. Tuesday.
D
Little Local Bank wrongfully fails to honor a check signed by its customer Andrea. Little Local Bank is a. not liable to Andrea for damages resulting from its refusal to pay. b. only liable to Andrea for damages resulting from its refusal to pay if Andrea takes action against the bank within one business day of the failure to honor the check. c. only liable to Andrea for one half of the damages resulting from its refusal to pay. d. liable to Andrea for damages resulting from its refusal to pay.
D
A bank cannot recover from a party who cashes a check bearing a forged drawer's signature once the bank has accepted and paid the item.
F
A bank may contractually shift to the customer the risk of forged checks created by the use of facsimile or other nonmanual signatures.
T
A bank that encodes information on an item after its issue warrants to any subsequent bank that the information is correct.
T
A check can be retained at its place of deposit and only its image can be presented for payment under an electronic presentment agreement.
T
A check is a special type of draft
T
A customer has sixty days from the date of receipt of a statement of an electronic transfer to notify the financial institution of any errors.
T
A customer must examine a bank statement and report any discovered forged signature to recover from the bank for the forgery.
T
A customer who writes a bad check may be subject to criminal prosecution.
T
A forged indorsement does not transfer title.
T