Exam 34: Checks and Electronic Transfers

Which of the following do a certified check and a cashier's check have in common?

Due to Susan Sharp's many fraudulent misstatements,Nelly Nice buys Susan's car.Nelly writes Susan a check for $5,000 in payment.Susan immediately negotiates the check to Patty Proper,who qualifies as a holder in due course.In the meantime,Nelly discovers that the car is junk and makes a timely and proper stop-payment order to her bank.However,when Patty presents the check for payment,the bank pays it anyway.Is the bank required to recredit Nelly's account?

Which of the following is true of the drawer-drawee relationship?

The relationship between a depositor and a bank are governed by a deposit agreement and Articles 3 & 4 of the UCC.

What section of the UCC mandates that a bank signature must appear on a certified check?

Wire transfer is used for transfer of funds across the country or around the world.This service is generally used by large business and financial institutions.

Checks that are more than six months old are called:

Lakeland Bank certifies a check that subsequently is cashed by Pine Federal Credit Union.Pine Federal Credit Union is not liable for any damages associated with the check.

In which of the following cases will a drawer and any persons who previously indorsed the check be discharged of their liability on the check?

Which of the following is an EXCEPTION to the mandatory availability schedules of the expedited Funds Availability Act?

A drawer whose bank paid checks over a stop-payment order may not be entitled to have his account recredited,if he is unable to show he suffered any loss.

A drawer can claim alteration as a reason for not charging a particular check to his account,even if the drawer has contributed to the alteration in some way.

Edith purchases what is represented to be a new DVD player from Big Al's Electronic Emporium,by giving Al a check for $200 drawn on Big Bank.Edith then discovers that the DVD player is a used model and calls Big Bank to place a stop-payment order on the check.Big Al negotiates the check to John who qualifies as a holder in due course.John presents the check to Big Bank the next day,and Big Bank pays the check.Which of the following statements is most accurate?

Laura gets a statement and a pile of paid checks from her bank on June 1.Within the pile of checks,is one check with a forged drawer's signature.Laura does not notify the bank about the forged check until the next month,July 1.Does this delay remove the bank's obligation to recredit Laura's account?

A bank is not authorized to pay a postdated check before the date on the check and charge the amount to the customer's account,unless the customer has given notice to the bank.

Abyss handed over a $500 check to Howard Brothers for building him a terrace garden.The next day,Abyss notices that one part of the garden has not been finished.He calls his bank to order a stop-payment on the check.When Howard Brothers presents the check next week,the bank honors it.Which of the following is true in this case?

The Electronic Funds Transfer Act governs "check conversion" transactions.

Adams wrote a check to Jimmy for $5,000.After three days,he met with an accident and died.Now Jimmy wants to collect money from the bank and so he deposited the check.However,the bank is refusing to pay.Is he entitled to get his money?

The main difference between a certified check and a cashier's check is that the bank is primarily liable on a certified check,but only secondarily liable on a cashier's check.

When both the bank and the customer failed to use ordinary care to prevent alteration or forgery of checks then a comparative negligence is used to determine liability for damages.