Question 1

Rhea writes a check for $100 drawn on Savers Credit Union and presents it to Timpani Jewelers for payment. If the check is not backed by sufficient funds, Rhea may be prosecuted for

Accepted Answer

A)   forgery.
B)   fraud.
C)   negligence.
D)   all of the choices.E) A) and B)
F) B) and D)

Question 2

Teri writes a check for $1,000 drawn on United Bank payable to Vida. Vida presents the check for payment to United Bank, which dishonors it. The party most likely liable to Vida is

Accepted Answer

A)   Teri in a civil suit.
B)   Teri in a criminal prosecution.
C)   United Bank in a civil suit.
D)   none of the choices.E) B) and C)
F) A) and D)

Question 3

Faye forges Greta's signature on a check "payable to the order of Faye" drawn on Greta's account in Home Bank. Most likely, if the bank pays the check

Accepted Answer

A)   the Federal Reserve will reimburse all parties for their costs.
B)   the loss will be apportioned among all of the bank's customers.
C)   Greta will be liable for the amount.
D)   the bank will have to recredit Greta's account.E) B) and C)
F) None of the above

Question 4

If a bank pays a stale check in good faith but without consulting the customer, the bank has no right to charge the customer's account for the amount.

Accepted Answer

A) True 
 B)False

Question 5

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.

Accepted Answer

A) True 
 B)False

Question 6

Elmore pays Fidelity Bank $1,000 plus a service fee to draw a check on itself made payable to Go Delivery Service. This is

Accepted Answer

A)   a cashier's check.
B)   an overdraft.
C)   a stale check.
D)   a stop-payment order.E) A) and D)
F) A) and B)

Question 7

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.

Accepted Answer

A) True 
 B)False

Question 8

Electronic banking makes it easier to issue a stop-payment order.

Accepted Answer

A) True 
 B)False

Question 9

Dan signs a check "pay to the order of Eton" drawn on Dan's account in Fidelity Bank and dates the check "May 1." Eton presents the check to the bank for payment on December 15. This is

Accepted Answer

A)   a cashier's check.
B)   an overdraft.
C)   a certified check.
D)   a stale check.E) All of the above
F) B) and D)

Question 10

Because the speed of check-processing time is increasing, to avoid overdrafts, an account-holder needs to verify that funds are available to cover a check when it is written.

Accepted Answer

A) True 
 B)False

Question 11

A customer can refuse to accept a substitute check created from the digital image of an original check as proof of payment.

Accepted Answer

A) True 
 B)False

Question 12

Tomas signs a check "pay to the order of University Bookstore" drawn on his account in Verity Bank to pay for his textbooks. The bookstore deposits the check in its account in West Bank. Like most checks, this check is

Accepted Answer

A)   virtual cash.
B)   digital cash.
C)   a special type of draft.
D)   a type of electronic fund transfer.E) B) and C)
F) C) and D)

Exam 24: Banking in the Digital Age

Rhea writes a check for $100 drawn on Savers Credit Union and presents it to Timpani Jewelers for payment. If the check is not backed by sufficient funds, Rhea may be prosecuted for

Correct Answer
verified

Electronic banking makes it easier to issue a stop-payment order.

Correct Answer
verified

Dan signs a check "pay to the order of Eton" drawn on Dan's account in Fidelity Bank and dates the check "May 1." Eton presents the check to the bank for payment on December 15. This is

Correct Answer
verified

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.

Correct Answer
verified

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.

Correct Answer
verified

A customer can refuse to accept a substitute check created from the digital image of an original check as proof of payment.

Correct Answer
verified

Because the speed of check-processing time is increasing, to avoid overdrafts, an account-holder needs to verify that funds are available to cover a check when it is written.

Correct Answer
verified

Tomas signs a check "pay to the order of University Bookstore" drawn on his account in Verity Bank to pay for his textbooks. The bookstore deposits the check in its account in West Bank. Like most checks, this check is

Correct Answer
verified

If a bank pays a stale check in good faith but without consulting the customer, the bank has no right to charge the customer's account for the amount.

Correct Answer
verified

Teri writes a check for $1,000 drawn on United Bank payable to Vida. Vida presents the check for payment to United Bank, which dishonors it. The party most likely liable to Vida is

Correct Answer
verified

Elmore pays Fidelity Bank $1,000 plus a service fee to draw a check on itself made payable to Go Delivery Service. This is

Correct Answer
verified

Faye forges Greta's signature on a check "payable to the order of Faye" drawn on Greta's account in Home Bank. Most likely, if the bank pays the check

Correct Answer
verified

Exam 24: Banking in the Digital Age

Rhea writes a check for $100 drawn on Savers Credit Union and presents it to Timpani Jewelers for payment. If the check is not backed by sufficient funds, Rhea may be prosecuted for

Correct AnswerverifiedShow Answer

Electronic banking makes it easier to issue a stop-payment order.

Correct AnswerverifiedShow Answer

Dan signs a check "pay to the order of Eton" drawn on Dan's account in Fidelity Bank and dates the check "May 1." Eton presents the check to the bank for payment on December 15. This is

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

A customer can refuse to accept a substitute check created from the digital image of an original check as proof of payment.

Correct AnswerverifiedShow Answer

Because the speed of check-processing time is increasing, to avoid overdrafts, an account-holder needs to verify that funds are available to cover a check when it is written.

Correct AnswerverifiedShow Answer

Tomas signs a check "pay to the order of University Bookstore" drawn on his account in Verity Bank to pay for his textbooks. The bookstore deposits the check in its account in West Bank. Like most checks, this check is

Correct AnswerverifiedShow Answer

If a bank pays a stale check in good faith but without consulting the customer, the bank has no right to charge the customer's account for the amount.

Correct AnswerverifiedShow Answer

Teri writes a check for $1,000 drawn on United Bank payable to Vida. Vida presents the check for payment to United Bank, which dishonors it. The party most likely liable to Vida is

Correct AnswerverifiedShow Answer

Elmore pays Fidelity Bank $1,000 plus a service fee to draw a check on itself made payable to Go Delivery Service. This is

Correct AnswerverifiedShow Answer

Faye forges Greta's signature on a check "payable to the order of Faye" drawn on Greta's account in Home Bank. Most likely, if the bank pays the check

Correct AnswerverifiedShow Answer

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