Exam 27: B: Checks and Banking in the Digital Age

Rikki signs a check "pay to the order of Scholar University" drawn on Rikki's account in State Bank to pay her tuition.Rikki is

Drew signs a check "pay to the order of Eppie" drawn on Drew's account in Fidelity Bank.Greta forges Eppie's indorsement.Fidelity pays the check.Most likely

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

Elmo pays First National Bank $1,000 plus a service fee to draw a check on itself made payable to Go Delivery Service.This is

Bank customers cannot demand that their original canceled checks be returned with their monthly statement.

A drawer is liable to the holder of a check if the check is not honored.

Elmer can write checks on his account at Finance City Bank.Gina steals the checks,forges Elmer's signature,and cashes the checks at Finance City.The bank is excused from any liability if,after receipt of the first forged check,Elmer fails to report the forgeries within

When a bank pays a check on which the drawer's signature is forged,generally the customer suffers the loss.

Kareem writes a check for $1,000 drawn on Liberty Bank and presents it to Maris.Maris presents the check for payment to Liberty Bank,which dis?hon?ors it.The party most likely liable to Maris is

Paris knowingly divulges to Media Exposure magazine information about Randy's e-money payments to City Bank without the consent of Randy or City Bank.Paris may be in violation of federal law

Any failure of a bank to honor a check because it would create an over?draft is a wrongful dishonor.

A creditor-debtor relationship can exist between a bank and its customer.

The maximum time that a bank can hold funds from deposited checks be?fore making them available to the depositor will not change.

Shakira issues a check drawn on Thrifty Bank to United Office Supply to pay for six computer desks.Later,Shakira discovers defects in the goods and orders Thrifty to stop payment on the check.Shakira does not renew the order,and the bank clears the check eight months later.The bank

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

Scott presents an instrument that states "pay to the order of Scott" to Town Bank for payment.This instrument is the most common type of negotiable instrument,which is

A bank that encodes information on an item after the item has been is?sued warrants to any subsequent bank that the encoded information is correct.

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 sig?na?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?

A customer can escape liability for failing to notify the bank of forged or altered checks when the customer can prove that the bank was negligent.

Liu signs a check "pay to the order of Marv" drawn on Liu's account in National Bank.Liu later orders National not to pay the check,but the bank pays it over Liu's order.Subsequent checks written on Liu's ac?count "bounce." Most likely liable for the costs to Liu is