Question 1

Bea 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, Bea may be prosecuted for​

Accepted Answer

A)   ​fraud.
B)   ​negligence.
C)   ​forgery.
D)   ​none of the choices.E) A) and B)
F) None of the above

Question 2

Only a customer or a person authorized to draw on an account can order a bank not to pay a check when it is presented for payment.

Accepted Answer

A) True 
 B)False

Question 3

A written stop payment order is only valid for thirty days.

Accepted Answer

A) True 
 B)False

Question 4

Daisy signs a check "pay to the order of Ewan" drawn on Daisy's account in Finance Bank. Graham forges Ewan's indorsement. Finance Bank pays the check. Most likely​

Accepted Answer

A)   ​Ewan will have to pay Daisy for the amount.
B)   ​the Federal Reserve will reimburse all parties for their costs.
C)   ​Finance Bank will have to recredit Daisy's account.
D)   ​Daisy will be liable for the amount.E) B) and C)
F) C) and D)

Question 5

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

Accepted Answer

A)   ​an oversight.
B)   ​a stale check.
C)   ​an overdraft.
D)   ​a certified check.E) All of the above
F) C) and D)

Question 6

Dalton presents an uncertified check for payment more than six months after its date. The check was drawn by Emma on her account in First Bank. If the bank follows the usual banking practice in such a case, it will​

Accepted Answer

A)   ​cash the check.
B)   ​refuse to cash the check.
C)   ​ask Dalton what he would prefer.
D)   ​consult Emma.E) C) and D)
F) A) and B)

Question 7

A substitute check is a paper reproduction of an original check without all of the information required on checks for automated processing.

Accepted Answer

A) True 
 B)False

Question 8

E-money replaces physical cash with virtual cash.

Accepted Answer

A) True 
 B)False

Question 9

When a bank draws a check on itself, the check is called a certified check.

Accepted Answer

A) True 
 B)False

Question 10

The first bank to receive a check for payment is the intermediary bank.

Accepted Answer

A) True 
 B)False

Question 11

A customer must examine a bank statement and report any discovered forged signature to recover from the bank for the forgery.

Accepted Answer

A) True 
 B)False

Question 12

The death of a customer immediately revokes a bank's authority to pay an item.

Accepted Answer

A) True 
 B)False

Question 13

Each bank in a collection chain must pass a check on before midnight of the day of its receipt.

Accepted Answer

A) True 
 B)False

Question 14

Riley pays State Bank $500 plus a service fee to draw a check on itself payable to Torque Plumbing. The party that is responsible for paying the check is​

Accepted Answer

A)   ​both Riley and State Bank.
B)   ​none of the choices.
C)   ​only State Bank.
D)   ​only Riley.E) None of the above
F) A) and B)

Question 15

Commercial banking practices consider a check that has been outstanding for three months to be a stale check.

Accepted Answer

A) True 
 B)False

Question 16

Smart cards carry and process security programming.

Accepted Answer

A) True 
 B)False

Question 17

A forged signature is effective as the signature of a drawer to the extent that is resembles the drawer's actual signature.

Accepted Answer

A) True 
 B)False

Question 18

A bank that encodes information on an item after its issue warrants to any subsequent bank that the information is correct.

Accepted Answer

A) True 
 B)False

Question 19

A check is a special type of draft.

Accepted Answer

A) True 
 B)False

Question 20

Fact Pattern 28-1
Kelly takes her car to Auto Repair Service, which repairs the car and bills Kelly for $500. She writes out a check drawn on Choice Bank, but later, believing that Auto Repair did not fix the car properly, issues a stop-payment order.
-Refer to Fact Pattern 28-1. ​If Choice pays the check, the bank

Accepted Answer

A)   ​is liable to Auto Repair for the time and trouble to return the payment.
B)   ​is liable for Kelly's loss due to the wrongful payment.
C)   ​can sue Auto Repair for breach of contract.
D)   ​can sue Kelly for a wrongful stop-payment order.E) All of the above
F) A) and B)

Exam 28: Banking in the Digital Age

Each bank in a collection chain must pass a check on before midnight of the day of its receipt.

Correct Answer
verified

Dalton presents an uncertified check for payment more than six months after its date. The check was drawn by Emma on her account in First Bank. If the bank follows the usual banking practice in such a case, it will

Correct Answer
verified

A forged signature is effective as the signature of a drawer to the extent that is resembles the drawer's actual signature.

Correct Answer
verified

Bea 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, Bea may be prosecuted for

Correct Answer
verified

Riley pays State Bank $500 plus a service fee to draw a check on itself payable to Torque Plumbing. The party that is responsible for paying the check is

Correct Answer
verified

A substitute check is a paper reproduction of an original check without all of the information required on checks for automated processing.

Correct Answer
verified

E-money replaces physical cash with virtual cash.

Correct Answer
verified

Correct Answer
verified

Smart cards carry and process security programming.

Correct Answer
verified

A customer must examine a bank statement and report any discovered forged signature to recover from the bank for the forgery.

Correct Answer
verified

The death of a customer immediately revokes a bank's authority to pay an item.

Correct Answer
verified

A check is a special type of draft.

Correct Answer
verified

Daisy signs a check "pay to the order of Ewan" drawn on Daisy's account in Finance Bank. Graham forges Ewan's indorsement. Finance Bank pays the check. Most likely

Correct Answer
verified

A written stop payment order is only valid for thirty days.

Correct Answer
verified

The first bank to receive a check for payment is the intermediary bank.

Correct Answer
verified

A bank that encodes information on an item after its issue warrants to any subsequent bank that the information is correct.

Correct Answer
verified

When a bank draws a check on itself, the check is called a certified check.

Correct Answer
verified

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

Correct Answer
verified

Only a customer or a person authorized to draw on an account can order a bank not to pay a check when it is presented for payment.

Correct Answer
verified

Commercial banking practices consider a check that has been outstanding for three months to be a stale check.

Correct Answer
verified

Exam 28: Banking in the Digital Age

Each bank in a collection chain must pass a check on before midnight of the day of its receipt.

Correct AnswerverifiedShow Answer

Dalton presents an uncertified check for payment more than six months after its date. The check was drawn by Emma on her account in First Bank. If the bank follows the usual banking practice in such a case, it will​

Correct AnswerverifiedShow Answer

A forged signature is effective as the signature of a drawer to the extent that is resembles the drawer's actual signature.

Correct AnswerverifiedShow Answer

Bea 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, Bea may be prosecuted for​

Correct AnswerverifiedShow Answer

Riley pays State Bank $500 plus a service fee to draw a check on itself payable to Torque Plumbing. The party that is responsible for paying the check is​

Correct AnswerverifiedShow Answer

A substitute check is a paper reproduction of an original check without all of the information required on checks for automated processing.

Correct AnswerverifiedShow Answer

E-money replaces physical cash with virtual cash.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Smart cards carry and process security programming.

Correct AnswerverifiedShow Answer

A customer must examine a bank statement and report any discovered forged signature to recover from the bank for the forgery.

Correct AnswerverifiedShow Answer

The death of a customer immediately revokes a bank's authority to pay an item.

Correct AnswerverifiedShow Answer

A check is a special type of draft.

Correct AnswerverifiedShow Answer

Daisy signs a check "pay to the order of Ewan" drawn on Daisy's account in Finance Bank. Graham forges Ewan's indorsement. Finance Bank pays the check. Most likely​

Correct AnswerverifiedShow Answer

A written stop payment order is only valid for thirty days.

Correct AnswerverifiedShow Answer

The first bank to receive a check for payment is the intermediary bank.

Correct AnswerverifiedShow Answer

A bank that encodes information on an item after its issue warrants to any subsequent bank that the information is correct.

Correct AnswerverifiedShow Answer

When a bank draws a check on itself, the check is called a certified check.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Only a customer or a person authorized to draw on an account can order a bank not to pay a check when it is presented for payment.

Correct AnswerverifiedShow Answer

Commercial banking practices consider a check that has been outstanding for three months to be a stale check.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Dalton presents an uncertified check for payment more than six months after its date. The check was drawn by Emma on her account in First Bank. If the bank follows the usual banking practice in such a case, it will

Correct Answer
verified

Correct Answer
verified

Bea 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, Bea may be prosecuted for

Correct Answer
verified

Riley pays State Bank $500 plus a service fee to draw a check on itself payable to Torque Plumbing. The party that is responsible for paying the check is

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Daisy signs a check "pay to the order of Ewan" drawn on Daisy's account in Finance Bank. Graham forges Ewan's indorsement. Finance Bank pays the check. Most likely

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified