Exam 18: Checks and Banking in the Digital Age

Julia opens a checking account with Washington Bank and deposits funds into the account.Julia and Washington Bank

A bank cannot recover from a party who cashes a check bearing a forged drawer's signature once the bank has accepted and paid the item.

The first bank to receive a check for payment is the depositary bank.

A bank that encodes information on an item after its issue warrants to any subsequent bank that the information is correct.

A check is a special type of draft.

A check can be retained at its place of deposit and only its image can be presented for payment under an electronic presentment agreement.

Jen signs a check "pay to the order of Key" drawn on Jen's account in Little Bank to buy Key's car.If there are insufficient funds in Jen's account to cover the amount of the check,but the bank pays it,this creates

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

The Uniform Commercial Code governs checks.

A bank has no right to charge a customer's account for the amount of a stale check.

Brandy forges Caleb's signature on a check "payable to the order of Brandy" drawn on Caleb's account in Downtown Bank.Caleb's forged signature is

The Federal Reserve System acts as a clearinghouse where banks exchange checks.

Gaining unauthorized access to an electronic fund transfer system is a felony.

If a customer's debit card is lost or stolen,the customer will not be liable for any unauthorized use of the card.

When processing a check,Superior Bank encodes information,such as the amount of the check,on the item.Superior thereby warrants to any subsequent bank or payor

A written stop payment order is valid for only thirty days.

A customer who writes a bad check may be subject to criminal prosecution.

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

Under the Check Clearing in the 21st Century Act,a bank has to credit a customer's account as soon as the bank receives the funds.

Elton presents an uncertified check for payment more than six months after its date.The check was drawn by Dakota on her account in First Community Bank.The usual banking practice in such a case is to