Exam 24: Banking in the Digital Age

Ian buys a cell phone in Jiffy Mart,using the means that accounts for more retail payments than any other. This means of payment is

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

Clyde issues a check payable to Discount Mart. Ethel,Discount's cashier,forges the store's indorsement and deposits the check in her bank account. Clyde's bank,Farmers State Bank,pays the check. Clyde can recover from

Awritten stop payment order is only valid for thirty days.

The Uniform Commercial Code regulates checks.

A check is a special type of draft.

Acheck that is presented for payment more than six months from its date is a stale check.

Stored-value cards can be used to buy goods and services offered by the cards' issuer.

Cleo writes a check for $100 drawn on Debit & Credit Bank and presents it to Elegant Jewelers for payment. If the check is not backed by sufficient funds,Cleo may be prosecuted for

An agency relationship arises between the customer and the bank when the customer writes a check on his or her account.

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

Nick steals two checks from Pauline-a blank check and a check payable to the order of Retail Outlets Company,drawn on Pauline's account with State Bank. Nick forges Pauline's sig-na-ture on the blank check and makes it payable to himself. Nick forges Retail Outlets's indorsement on the back of the check payable to Retail Outlets,and adds "Pay to the order of Nick." At United Credit Union,Nick indorses the back of both checks with his own name and gives them to United for cash. United does not know about the theft or the forged signatures and presents the checks to State Bank,which pays them. Pauline,who was not negli-gent,discovers the forgeries and asks State Bank to recredit her ac-count. Who suffers the loss on each check?

Marta has a checking account with Neighbors Bank. Marta signs a check "payable to Olive" drawn on Marta's account. Neighbors Bank is

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

Simon signs a check "pay to the order of Tilly" drawn on Simon's account in United Bank. Vela forges Tilly's indorsement,Western Bank cashes the check,and Vela disappears. United pays Western and debits Simon's account. Most likely,the ultimate loss will fall on

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

When a bank pays a check on which the drawer's signature is forged,generally the customer suffers the loss.

When a bank draws a check on itself,the check is called a cashier's check.

Falls River Bank receives a check drawn on the account of Get-Rich Industries,Inc.,one of the bank's customers,at 3 p.m. Friday. Hildy,the pre-senter of the check,is not one of the bank's customers. The bank uses deferred posting with a 2 p.m. cutoff hour. If it decides to dis-honor the check,it must do so by midnight

The Check Clearing in the 21st Century Act (Check 21)applies only in about 75 percent of the states.