Exam 18: Checks and Banking in the Digital Age

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

Scott presents an instrument that states "pay to the order of Scott" to Town Bank for payment.This instrument is the most common type of negotiable instrument,which is

Elmo pays First National Bank $1,000 plus a service fee to draw a check on itself made payable to Go Delivery Service.This is

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

Roald writes a check for $700 to Savannah.Savannah indorses the check in blank and transfers it to Twitchell,who alters the check to read $7,000 and presents it to Union Bank,the drawee,for payment.The bank cashes it.Roald discovers the alter-ation and files a suit against the bank.Roald can recover

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

An oral stop payment order is valid for fourteen days.

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

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 customer has sixty days from the date of receipt of a statement of an electronic transfer to notify the financial institution of any er-rors.

A bank may contractually shift to the customer the risk of forged checks created by the use of facsimile or other nonmanual signatures.

A bank is not responsible for determining whether a signature on a customer's check is genuine.

The rights and duties of a bank and its customer are contractual.

Mary writes a check drawn on County Bank for $400 "payable to Bill" on May 1.Mary dies on May 3.Bill presents the check to County Bank on May 5.County Bank

If a customer does not have sufficient funds to pay a check available in his or her checking account and the bank dishonors the check,the bank is liable to the customer.

Daria writes a check for $100 drawn on Village Bank and presents it to Fast Cash,Inc.,for payment.If the check is not backed by sufficient funds,Daria may be prosecuted for

Dhani signs a check "pay to the order of Etan" drawn on Dhani's account in First State Bank and dates the check "May 1." Etan presents the check to the bank for payment on December 15.This is

Fact Pattern 18-2 Tom draws a check,on his account in State Bank in New York,payable to Digital Media,Inc.,in San Francisco.Digital deposits the check in its ac-count at First National Bank. -Refer to Fact Pattern 18-2.Tom's bank is

Finance 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 de-ferred posting with a 2 p.m.cutoff hour.If it decides to dis-honor the check,it must do so by midnight

Clyde issues a check payable to Discount Mart.Elle,Discount's cashier,forges the store's indorsement and deposits the check in her bank ac-count.Clyde's bank,Main Street Bank,pays the check.Clyde can recover from