Exam 30: Checks and Funds Transfers

Funds transfers made by businesses are governed by __________ regulations.

When a drawee bank pays on a check that lacks an essential endorsement:

The delivery of a check is an assignment of money on deposit,and the drawee bank is required to pay the holder the amount of the check.

All of the following statements is incorrect concerning stale checks except: ______.

A drawer may be held criminally liable if a check or draft is dishonored.

The Electronic Fund Transfers Act (EFTA)covers all transactions,including those that originated by commercial paper.

The standard form of a check is automatically payable on demand.

A forged endorsement must be reported within one year of the time that the bank statement is received.

Consumers have the responsibility to examine periodic statements provided by their financial institutions.If a loss would not have occurred but for the failure of a consumer to report within __________ of the transmittal of the statement any unauthorized transfer,the loss is borne by the consumer.

The "preclusion rule" prevents or precludes the customer from forging a signature and then making a claim against the bank.

Sondra realized on Tuesday that she had dropped her bank EFT card after using it at an automatic teller machine.She telephoned the bank on the following Monday to notify it of the loss.By that time,someone had used the card to withdraw $800 from Sondra's account.The bank said it would cover $300 of that amount.Sondra sued for the full amount,claiming that she had exercised reasonable care in reporting the loss,especially because the card was lost on bank premises.Will she be able to recover the full $800?

To be effective,checks must be executed on forms that are printed expressly for that purpose and issued by a bank or other financial institution.

In a complex funds transfer,an intermediary bank may receive and transmit the payment order.