Exam 29: Bank Deposits, Collections, and Funds Transfers

If a bank pays on a check even though it has a "stop payment order," it is liable to the customer only if the customer can prove a loss because of the payment.

On April 6, Ellen sends a check for a magazine subscription and then discovers she has already paid for it.She calls her bank and orders that the bank not make payment.That order will be good until:

If a checking account customer's funds are insufficient to pay all of the items that the bank receives on that account on a given day, the bank may charge the items against the account in any order the bank deems convenient without incurring liability to the customer/drawer for choosing one item over another.

Each provisional settlement made in the collection chain is made final when the next bank takes the check.

A written stop payment order is effective until revoked in writing.

If Valley Bank pays a check over a stop payment order of one of its customers, Valley Bank is subrogated to the rights of:

Banks may not pay checks issued by a customer who has died.

What is the effect of a payor bank's dishonor of a check?

Lois takes her paycheck to Third National Bank for deposit at 6 p.m.on Wednesday.Third National Bank has until when to forward the check?

An ATM transaction is activated with a plastic identification card and a POS.

Doug takes a $500 check drawn by Gail to Gail's drawee bank to cash it.Gail has over $10,000 on deposit in her account.If her bank refuses to pay Doug:

The Check Clearing for the 21st Century Act requires banks to accept checks in electronic form.

If a payor bank gives the provisional settlement as required, it has until the midnight deadline to return the item.

If a depositor in First Bank takes a check written on Valley Bank to First Bank to deposit, it will normally be credited to the depositor's account at the time of the transaction.This is called a "provisional" credit.

Point of sale systems permit customers to charge items to a charge account at a bank.

The payor bank and the drawee bank are two separate banks.

Which of the following is NOT a duty that a collecting bank has in the collection process?

Darla drew a $100 check on ABC Bank payable "to the order of Pamela." Pamela cashed the check at First Bank. First Bank is an agent of Pamela until the drawee bank pays the check.

Sylvia draws a check on ABC Bank payable "to the order of Ann Smith." Ann indorses it and deposits it in First Bank.First Bank is a:

The fact that a drawer has filed a stop payment order automatically relieves the drawer of liability on the underlying obligation.