Question 1

A check that is more than six months old is called a

Accepted Answer

A)  stale check. 
B)  postdated check. 
C)  certified check. 
D)  bad check.

Question 2

A check more than six months old is void.

Accepted Answer

A) True 
 B)False

Question 3

A depositor who writes a bad check has committed a criminal act.

Accepted Answer

A) True 
 B)False

Question 4

When a customer presents a merchant with a debit card to purchase goods, the transaction is called a(n)

Accepted Answer

A)  EFTS transfer. 
B)  ATM transaction. 
C)  VISA transaction. 
D)  POS transaction.

Question 5

Renee made out a check payable to Dawn. Dawn had the check certified by First National, the drawee bank, and then indorsed it to Quatro, who is the present holder. What effect does certification have on the parties?

Accepted Answer

A)  Renee alone is discharged from liability. 
B)  Dawn alone is discharged from liability. 
C)  First National becomes primarily liable, and both Renee and Dawn are discharged from liability. 
D)  Renee remains secondarily liable.

Question 6

When a depositor dies, the authority of the bank to pay or certify the depositor's checks ends immediately.

Accepted Answer

A) True 
 B)False

Question 7

Jamison wrote a check for $500 drawn on Charter Bank and gave it to Donalson. When Donalson presented the check for payment the bank dishonored it for insufficient funds. Donalson may sue:

Accepted Answer

A)  Both Charter Bank and Jamison. 
B)  Jamison only. 
C)  Charter Bank only. 
D)  the Federal Reserve Bank.

Question 8

A check is always payable on ____________________.

Accepted Answer

The answer of A check is always payable on ____________________....

Question 9

If the payee or a holder has a check certified, the drawer is released from all liability for payment.

Accepted Answer

A) True 
 B)False

Question 10

Udall issued a $400 check to Jackson. Udall's bank refused to pay the check when Jackson presented it, even though there were sufficient funds in Udall's account. Can Jackson sue the bank for damages for the wrongful dishonor of the check?

Accepted Answer

The answer of Udall issued a $400 check to Jackson....

Question 11

Giving a postdated check does not constitute a present fraud.

Accepted Answer

A) True 
 B)False

Question 12

If a bank wrongfully dishonors a depositor's check, the bank is liable only to the holder.

Accepted Answer

A) True 
 B)False

Question 13

A postdated check is unenforceable.

Accepted Answer

A) True 
 B)False

Question 14

Traveler's checks are

Accepted Answer

A)  issued in set denominations. 
B)  issued without a named payee. 
C)  readily accepted all over the world. 
D)  all of these.

Question 15

A check written for an amount greater than the amount the depositor has in his or her account is called a(n) ____________________.

Accepted Answer

The answer of A check written for an amount greater...

Question 16

A postdated check is

Accepted Answer

A)  payable on demand. 
B)  invalid. 
C)  payable on its due date. 
D)  payable thirty days after its due date.

Question 17

When Dale received his bank statement, he examined the canceled checks returned with the statement and discovered that one check had been signed with Dale's name by an unauthorized person. Dale immediately informed the bank. Should Dale's checking account have been charged by the bank for the amount of this particular check?

Accepted Answer

A)  Yes; the bank, after carefully inspecting the instrument at the time of payment, is not liable for errors made on checks cashed for a depositor. 
B)  Yes; the bank is relieved from liability if the drawer fails to exercise great care in seeing that only properly written checks are presented for payment at the bank. 
C)  No; the bank itself is liable when it cashes a check on which the drawer's signature has been forged. 
D)  No; the bank itself is liable for negligence on the part of any of its depositors.

Question 18

What is a major feature of the proposed concept of virtual cash?

Accepted Answer

The answer of What is a major feature of the...

Question 19

When two or more checks are presented to a bank for payment at the same time, and the depositor's account is insufficient to pay them all, the bank may

Accepted Answer

A)  declare all the checks automatically void. 
B)  pay the checks in any order until the funds in the depositor's account run out. 
C)  declare all the checks stale checks. 
D)  all of these.

Question 20

To hold a bank liable for a forged signature, after the canceled check has been returned, the drawer has to report the forgery within

Accepted Answer

A)  thirty days. 
B)  sixty days. 
C)  ninety days. 
D)  six months.

Exam 22: Checks and the Banking System in the Twenty-First Century

A check that is more than six months old is called a

A check more than six months old is void.

A depositor who writes a bad check has committed a criminal act.

When a customer presents a merchant with a debit card to purchase goods, the transaction is called a(n)

Renee made out a check payable to Dawn. Dawn had the check certified by First National, the drawee bank, and then indorsed it to Quatro, who is the present holder. What effect does certification have on the parties?

When a depositor dies, the authority of the bank to pay or certify the depositor's checks ends immediately.

Jamison wrote a check for $500 drawn on Charter Bank and gave it to Donalson. When Donalson presented the check for payment the bank dishonored it for insufficient funds. Donalson may sue:

A check is always payable on ____________________.

If the payee or a holder has a check certified, the drawer is released from all liability for payment.

Udall issued a $400 check to Jackson. Udall's bank refused to pay the check when Jackson presented it, even though there were sufficient funds in Udall's account. Can Jackson sue the bank for damages for the wrongful dishonor of the check?

Giving a postdated check does not constitute a present fraud.

If a bank wrongfully dishonors a depositor's check, the bank is liable only to the holder.

A postdated check is unenforceable.

Traveler's checks are

A check written for an amount greater than the amount the depositor has in his or her account is called a(n) ____________________.

A postdated check is

What is a major feature of the proposed concept of virtual cash?

When two or more checks are presented to a bank for payment at the same time, and the depositor's account is insufficient to pay them all, the bank may

To hold a bank liable for a forged signature, after the canceled check has been returned, the drawer has to report the forgery within