Question 1

The Uniform Commercial Code governs checks.

Accepted Answer

A) True 
 B)False

Question 2

Fact Pattern 25-1 (Questions 17 and 18 apply)
Echo takes her car to Fix-It,Inc.,which repairs the car and bills Echo for $500.Echo writes out a check drawn on Capital Bank,but later,believing that Fix-It did not repair the car properly,issues a stop-payment order.
-Refer to Fact Pattern 25-1.Capital Bank pays the check.Capital

Accepted Answer

A) can sue Echo for a wrongful stop-payment order. 
B) can sue Fix-It for breach of contract. 
C) can sue no one because it paid a check that was not properly payable. 
D) is liable for Echo's loss due to the wrongful payment. 
A) can sue Echo for a wrongful stop-payment order. 
B) can sue Fix-It for breach of contract. 
C) can sue no one because it paid a check that was not properly payable. 
D) is liable for Echo's loss due to the wrongful payment.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

A check is a special type of draft.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Financial institutions that exchange digital images of checks do not have to exchange the original paper checks.

Accepted Answer

A) True 
 B)False

Question 8

A forged indorsement does NOT transfer title.

Accepted Answer

A) True 
 B)False

Question 9

A bank may NOT pay any checks on a customer's account after the date of the customer's death.

Accepted Answer

A) True 
 B)False

Question 10

The incompetence of a customer revokes a bank's authority to pay an item.

Accepted Answer

A) True 
 B)False

Question 11

A bank is NOT obligated to pay an uncertified check presented less than six months from its date.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) cash the check. 
B) consult the customer. 
C) refuse to cash the check. 
D) ask the payee what he or she would prefer. 
A) cash the check. 
B) consult the customer. 
C) refuse to cash the check. 
D) ask the payee what he or she would prefer.

Question 13

A check is NOT a substitute for cash.

Accepted Answer

A) True 
 B)False

Question 14

If there are insufficient funds to cover the amount of a check in a customer's account,the bank may pay the item and create an overdraft without the customer's authorization.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

A bank that pays a customer's check with a forged drawer's signature can generally pass the loss onto the customer.

Accepted Answer

A) True 
 B)False

Question 17

Currently,it is not clear which,if any,laws apply to the security of e-money payment information.

Accepted Answer

A) True 
 B)False

Question 18

Martha has a checking account with Hometown Bank.Martha signs a check "payable to Phillipa" drawn on Martha's Hometown Bank account.Hometown Bank is

Accepted Answer

A) the payer. 
B) the drawee. 
C) the drawer. 
D) the payee. 
A) the payer. 
B) the drawee. 
C) the drawer. 
D) the payee.

Question 19

When a customer deposits cash into a checking account,he or she becomes a debtor for the amount deposited.

Accepted Answer

A) True 
 B)False

Question 20

A bank must be able to provide customers with legible copies of checks paid for up to

Accepted Answer

A) one year. 
B) five years. 
C) seven years. 
D) nine years. 
A) one year. 
B) five years. 
C) seven years. 
D) nine years.

Exam 25: Checks and Banking in the Digital Age

The Uniform Commercial Code governs checks.

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

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

A check is a special type of draft.

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

Financial institutions that exchange digital images of checks do not have to exchange the original paper checks.

A forged indorsement does NOT transfer title.

A bank may NOT pay any checks on a customer's account after the date of the customer's death.

The incompetence of a customer revokes a bank's authority to pay an item.

A bank is NOT obligated to pay an uncertified check presented less than six months from its date.

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

A check is NOT a substitute for cash.

If there are insufficient funds to cover the amount of a check in a customer's account,the bank may pay the item and create an overdraft without the customer's authorization.

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

A bank that pays a customer's check with a forged drawer's signature can generally pass the loss onto the customer.

Currently,it is not clear which,if any,laws apply to the security of e-money payment information.

Martha has a checking account with Hometown Bank.Martha signs a check "payable to Phillipa" drawn on Martha's Hometown Bank account.Hometown Bank is

When a customer deposits cash into a checking account,he or she becomes a debtor for the amount deposited.

A bank must be able to provide customers with legible copies of checks paid for up to

Introduction to the Law and Our Legal System

Ethics in Business

The Courts and Alternative Dispute Resolution

Constitutional Law

Torts and Cyber Torts

Intellectual Property and Internet Law

Criminal Law and Cyber Crime

Introduction to Contracts

Offer and Acceptance

Consideration

Capacity

The Legality of Agreements

Mistakes and Other Contract Defects

Written Contracts

Third Party Rights

Contract Discharge and Remedies

E-Contracts

Introduction to Sales and Lease Contracts

Title and Risk of Loss

Performance and Breach

Warranties and Product Liability

Consumer Protection

The Essentials of Negotiability

Transferability and Liability

Agency

Employment and Immigration Law

Discrimination and Labor Law

Sole Proprietorships,partnerships, Limited

Formation and Termination of a Corporation

Management and Ownership of a Corporation

Secured Transactions

Creditors Rights and Remedies

Bankruptcy

Insurance

Morgages and Foreclosures

Personal Property and Bailments

Real Property

Landlord and Tenant

Wills and Trusts

Administrative Law

Antitrust Law

International Law

Filters