Exam 31: Checks and Funds Transfers

A check may be certified by a bank on request of the drawer or the holder.

Stop payment orders:

Morris issued a check to Al in payment of a debt.There were sufficient funds in Morris' account to cover the check when it was presented for payment.However,due to an error,the bank dishonored the check.Which of the following parties is/are potentially liable to the holder?

A check is a particular kind of draft.

Checks that involve amounts of more than $5,000 generally trigger the bank reporting requirements under the USA Patriot Act.

If oral,a stop payment order is binding on the bank for __________ days unless confirmed in writing within that time.

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

Which of the following statements is correct concerning a stale check?

Certification of a check at the request of a holder:

A bank must be given a reasonable amount of time to put a stop payment order into effect.

A bank is not required to pay a check presented more than six months after its date.

Which of the following statements describes a check?

A consumer who notifies the issuer of an EFT card within two (2)days after learning of a loss or theft of the card can be held to a maximum liability of $500 for unauthorized use of the card; failure to notify within this time will increase the consumer's liability for losses to a maximum of $5,000.

The Railway Express Agency delivered a shipment of goods to Lorraine.Payment for the goods was made with a certified check,payable to the order of the Railway Express Agency.The check was drawn by Lorraine on the First National Bank of Detroit.Later,the bank refused to pay the check when it was presented by Railway Express,the holder,because the bank had become insolvent and stopped doing business.The Railway Express Agency sued Lorraine.Lorraine claimed that she was not liable on the check because it was certified.Is she correct?

The fact that payment on a check has been stopped does not affect its negotiable character.

A check is drawn on the assumption that the bank has sufficient funds in the drawer's account for payment.

A bank always is liable for making payments on a postdated check.

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.