Question 1

When a customer deposits cash into a checking account,he or she becomes a debtor for the amount deposited.

Accepted Answer

A) True 
 B)False

Question 2

Trudy forges Uma's signature on a check "payable to the order of Trudy" drawn on Uma's account in Verity 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 Verity's customers. 
C)  ​Uma will be liable for the amount. 
D)  ​Verity will have to recredit Uma's account. 
A)  ​the Federal Reserve will reimburse all parties for their costs. 
B)  ​the loss will be apportioned among all of Verity's customers. 
C)  ​Uma will be liable for the amount. 
D)  ​Verity will have to recredit Uma's account.

Question 3

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 4

Any failure of a bank to honor a check because it would create an over-draft is a wrongful dishonor.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Ervin signs a check "pay to the order of Felicia" drawn on Ervin's account in Garden Valley Bank.Ervin later orders Garden Valley not to pay the check,but the bank pays it over Ervin's order.Subsequent checks written on Ervin's ac-count "bounce." Most likely liable for the costs to Ervin is​

Accepted Answer

A)  ​any party to whom a subsequent check was written. 
B)  ​Ervin. 
C)  ​Felicia. 
D)  ​Garden Valley Bank. 
A)  ​any party to whom a subsequent check was written. 
B)  ​Ervin. 
C)  ​Felicia. 
D)  ​Garden Valley Bank.

Question 7

Best Banking Bank creates a paper reproduction of customer Sophie's check with the statement "This is a legal copy of your check.You can use it in the same way you would use the original check." This is​

Accepted Answer

A)  ​a certified check. 
B)  ​a cashier's check. 
C)  ​a substitute check. 
D)  ​a void check. 
A)  ​a certified check. 
B)  ​a cashier's check. 
C)  ​a substitute check. 
D)  ​a void check.

Question 8

Tomas writes a check for $1,000 drawn on Unified Bank and presents it to Viola.Viola presents the check for payment to Unified Bank,which dishonors it.The party most likely liable to Viola is​

Accepted Answer

A)  ​Tomas in a civil suit. 
B)  ​Tomas in a criminal prosecution. 
C)  ​Unity Bank in a civil suit. 
D)  ​none of the choices. 
A)  ​Tomas in a civil suit. 
B)  ​Tomas in a criminal prosecution. 
C)  ​Unity Bank in a civil suit. 
D)  ​none of the choices.

Question 9

A customer can stop payment on a check that has been certified or accepted by a bank.

Accepted Answer

A) True 
 B)False

Question 10

Smith & Jones Associates is a business customer of Superior Bank.Under federal law,Smith & Jones cannot demand​

Accepted Answer

A)  ​any proof of payment except Superior's good faith. 
B)  ​monthly statements. 
C)  ​recrediting of its account on payment of a forged item. 
D)  ​the return of its original checks with its monthly statements. 
A)  ​any proof of payment except Superior's good faith. 
B)  ​monthly statements. 
C)  ​recrediting of its account on payment of a forged item. 
D)  ​the return of its original checks with its monthly statements.

Question 11

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 12

Martha has a checking account with Hometown Bank.Martha signs a check "payable to Phillipa" drawn on Martha's Hometown Bank account.Hometown Bank is

Accepted Answer

A)  ​none of the choices. 
B)  ​the drawee. 
C)  ​the drawer. 
D)  ​the payee. 
A)  ​none of the choices. 
B)  ​the drawee. 
C)  ​the drawer. 
D)  ​the payee.

Question 13

Ellen pays State Bank $500 plus a service fee to draw a check on itself payable to Paul's Plumbing.Which of the following parties is responsible for paying the check?

Accepted Answer

A)  ​Only Ellen 
B)  ​Both Ellen and State Bank 
C)  ​Only State Bank 
D)  ​None of the parties 
A)  ​Only Ellen 
B)  ​Both Ellen and State Bank 
C)  ​Only State Bank 
D)  ​None of the parties

Question 14

Avis signs a check "pay to the order of Blythe" drawn on Avis's account in County Bank.Avis has $400 in her account but the amount of the check is $500,which the bank pays.This is​

Accepted Answer

A)  ​a dishonored check. 
B)  ​an overdraft. 
C)  ​a postdated check. 
D)  ​a stale check. 
A)  ​a dishonored check. 
B)  ​an overdraft. 
C)  ​a postdated check. 
D)  ​a stale check.

Question 15

A certified check is a check that has been accepted by the bank on which it is drawn.

Accepted Answer

A) True 
 B)False

Question 16

Jacob writes Phillip an uncertified check for $500 on January 1.Seven months later,Phillip presents the check at the bank.The bank pays the check in good faith without consulting Jacob.The bank​

Accepted Answer

A)  ​does not have the right to charge Jacob's account for $500. 
B)  ​only has the right to charge Jacob's account for $250. 
C)  ​has the right to charge Jacob's account for $500. 
D)  ​can be held liable for breach of contract. 
A)  ​does not have the right to charge Jacob's account for $500. 
B)  ​only has the right to charge Jacob's account for $250. 
C)  ​has the right to charge Jacob's account for $500. 
D)  ​can be held liable for breach of contract.

Question 17

On Friday morning,Geoff deposits into his account at Heartland Bank a $500 check from Imelda,who also has an account at Heartland.On that same day,this check is considered​

Accepted Answer

A)  ​cashiered. 
B)  ​certified. 
C)  ​paid. 
D)  ​provisionally credited. 
A)  ​cashiered. 
B)  ​certified. 
C)  ​paid. 
D)  ​provisionally credited.

Question 18

A substitute check is a paper reproduction of the front and back of an original check that contains all the same information required on checks for automated processing.

Accepted Answer

A) True 
 B)False

Question 19

Jackie inserts a debit card issued by her bank into a machine and keys in her personal identification number.She is then able to withdraw $500 in cash.Jackie is using

Accepted Answer

A)  ​an automated teller machine. 
B)  ​a point-of-sale system. 
C)  ​a direct deposit system. 
D)  ​an Internet payment system. 
A)  ​an automated teller machine. 
B)  ​a point-of-sale system. 
C)  ​a direct deposit system. 
D)  ​an Internet payment system.

Question 20

On Monday,Michelle deposits in her account at Fiscal Bank a local check for $500.After 5:00 p.m.on Friday,from these funds,Michelle can withdraw no more than​

Accepted Answer

A)  ​$100. 
B)  ​$400. 
C)  ​$500. 
D)  ​$600. 
A)  ​$100. 
B)  ​$400. 
C)  ​$500. 
D)  ​$600.

Exam 25: Checks and Banking in the Digital Age

When a customer deposits cash into a checking account,he or she becomes a debtor for the amount deposited.

Trudy forges Uma's signature on a check "payable to the order of Trudy" drawn on Uma's account in Verity Bank.Most likely,if the bank pays the check​

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

Any failure of a bank to honor a check because it would create an over-draft is a wrongful dishonor.

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

Ervin signs a check "pay to the order of Felicia" drawn on Ervin's account in Garden Valley Bank.Ervin later orders Garden Valley not to pay the check,but the bank pays it over Ervin's order.Subsequent checks written on Ervin's ac-count "bounce." Most likely liable for the costs to Ervin is​

Best Banking Bank creates a paper reproduction of customer Sophie's check with the statement "This is a legal copy of your check.You can use it in the same way you would use the original check." This is​

Tomas writes a check for $1,000 drawn on Unified Bank and presents it to Viola.Viola presents the check for payment to Unified Bank,which dishonors it.The party most likely liable to Viola is​

A customer can stop payment on a check that has been certified or accepted by a bank.

Smith & Jones Associates is a business customer of Superior Bank.Under federal law,Smith & Jones cannot demand​

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.

Martha has a checking account with Hometown Bank.Martha signs a check "payable to Phillipa" drawn on Martha's Hometown Bank account.Hometown Bank is

Ellen pays State Bank $500 plus a service fee to draw a check on itself payable to Paul's Plumbing.Which of the following parties is responsible for paying the check?

Avis signs a check "pay to the order of Blythe" drawn on Avis's account in County Bank.Avis has $400 in her account but the amount of the check is $500,which the bank pays.This is​

A certified check is a check that has been accepted by the bank on which it is drawn.

Jacob writes Phillip an uncertified check for $500 on January 1.Seven months later,Phillip presents the check at the bank.The bank pays the check in good faith without consulting Jacob.The bank​

On Friday morning,Geoff deposits into his account at Heartland Bank a $500 check from Imelda,who also has an account at Heartland.On that same day,this check is considered​

A substitute check is a paper reproduction of the front and back of an original check that contains all the same information required on checks for automated processing.

Jackie inserts a debit card issued by her bank into a machine and keys in her personal identification number.She is then able to withdraw $500 in cash.Jackie is using

On Monday,Michelle deposits in her account at Fiscal Bank a local check for $500.After 5:00 p.m.on Friday,from these funds,Michelle can withdraw no more than​

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

Ervin signs a check "pay to the order of Felicia" drawn on Ervin's account in Garden Valley Bank.Ervin later orders Garden Valley not to pay the check,but the bank pays it over Ervin's order.Subsequent checks written on Ervin's ac-count "bounce." Most likely liable for the costs to Ervin is

Best Banking Bank creates a paper reproduction of customer Sophie's check with the statement "This is a legal copy of your check.You can use it in the same way you would use the original check." This is

Tomas writes a check for $1,000 drawn on Unified Bank and presents it to Viola.Viola presents the check for payment to Unified Bank,which dishonors it.The party most likely liable to Viola is

Smith & Jones Associates is a business customer of Superior Bank.Under federal law,Smith & Jones cannot demand

Avis signs a check "pay to the order of Blythe" drawn on Avis's account in County Bank.Avis has $400 in her account but the amount of the check is $500,which the bank pays.This is

Jacob writes Phillip an uncertified check for $500 on January 1.Seven months later,Phillip presents the check at the bank.The bank pays the check in good faith without consulting Jacob.The bank

On Friday morning,Geoff deposits into his account at Heartland Bank a $500 check from Imelda,who also has an account at Heartland.On that same day,this check is considered

On Monday,Michelle deposits in her account at Fiscal Bank a local check for $500.After 5:00 p.m.on Friday,from these funds,Michelle can withdraw no more than