Exam 22: Checks and Banking in the Digital Age

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

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

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

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

Fact Pattern 22-2 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 22-2. Tom's bank is

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

Fact Pattern 22-1 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 22-1. Capital Bank pays the check. Capital

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

Kris presents an instrument that states "pay to the order of Kris" to Metro Bank for payment. This is a special type of draft drawn on a bank, ordering the bank to pay a fixed amount of money on demand. This is

A customer must examine a bank statement and report any discovered forged signa?ture to recover from the bank for the forgery.

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

The Uniform Commercial Code governs checks.

Stored-value cards are a form of digital cash.

Albert buys a surround sound system from his neighbor George at George's garage sale. Albert writes George a check for $250 for the sound system. George is

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

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

Ellen pays State Bank $500 plus a service fee to draw a check on itself payable to Paul's Plumbing. Which of the following parties is responsible for paying the check?

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

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

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