Exam 14: Checks and Banking in the Digital Age

Each bank in a collection chain must pass a check on before noon of the day of its receipt.

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

Little Local Bank wrongfully fails to honor a check signed by its customer Andrea. Little Local Bank is

A bank cannot recover from a party who cashes a check bearing a forged drawer's signature once the bank has accepted and paid the item.

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

The Uniform Commercial Code governs checks.

Jackie inserts a debit card issued by her bank into a machine and keys in her personal identification number. She is then able to withdraw $500 in cash. Jackie is using

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

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

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

A check can be retained at its place of deposit and only its image can be presented for payment under an electronic presentment agreement.

Hoppy steals two checks from Eagle Retail Stores, Inc.-a blank check and a check payable to the order of General Supplies Company (GSC), drawn on Eagle's account with First National Bank. Hoppy forges Eagle's signa?ture on the blank check and makes it payable to himself. Hoppy forges GSC's indorsement on the back of the check payable to GSC, and adds "Pay to the order of Hoppy." At Friendly Credit, Inc., Hoppy indorses the back of both checks with his own name and gives them to Friendly for cash. Friendly does not know about the theft or the forged signatures and presents the checks to First National, which pays them. Eagle, which was not negli?gent, discovers the forgeries and asks First National to recredit its ac?count. Who suffers the loss on each check?