Exam 22: Checks and the Banking System in the Twenty-First Century

Reynolds sent Winston a check for $1,000 as payment on a debt. The check was dated March 1, but Winston did not present the check to Wider National Bank, the drawee, until October 8 the same year. If Wider National Bank refuses to pay the check, claiming it is stale, then it becomes liable to

A bank is required to honor all checks written by a depositor, even when there are insufficient funds in the depositor's account.

A depositor has the right to stop payment on a check he or she has written.

On May 5, Alston issued a $150 check to Mauch. Three days later, on May 8, Alston died. Mauch presented the check to the bank for payment on May 10. The bank knew of Alston's death but paid the $150 to Mauch. Was the bank's action legal?

To hold the bank liable for payment of a check with a forged indorsement, the drawer must report the forgery within ____________________.

One type of relationship between a bank and a depositor is that of debtor-creditor.

A bank may refuse to pay a depositor's check for any reason.

If a drawer has a check certified, the drawer is still ____________________ liable for payment of the check.

Braun issued a $35 check to Rice. Rice took the check to Braun's bank and had it certified. Rice then raised the amount to $350 and negotiated it to Turner. Turner presented the check for payment and received $350. When Braun received her canceled checks, she noticed the alteration and notified the bank. Who will suffer the loss?

Willis signed a blank check and left it in his desk drawer. A thief stole the check, filled it in, and presented it to the bank for payment. The bank paid the check. Can Willis recover the amount of the check from the bank?