Question 1

When processing a check, Sterling Bank encodes information, such as the amount of the check, on the item. Sterling thereby warrants to any subsequent bank or payor​

Accepted Answer

A)  ​the item has been returned to the drawer. 
B)  ​nothing. 
C)  ​the check has been processed manually. 
D)  ​the encoded information is correct.

Question 2

An agency relationship arises between the customer and the bank when the customer writes a check on his or her account.

Accepted Answer

A) True 
 B)False

Question 3

Dhani signs a check "pay to the order of Eton" drawn on Dhani's account in Fidelity Guaranty Bank and dates the check "May 1." Eton presents the check to the bank for payment on December 15. This is​

Accepted Answer

A)  ​an oversight. 
B)  ​an overdraft. 
C)  ​a certified check. 
D)  ​a stale check.

Question 4

State Bank agrees to accept a check by setting aside sufficient funds to cover the amount. This check is considered​

Accepted Answer

A)  ​cashed. 
B)  ​certified. 
C)  ​deposited. 
D)  ​a provisional credit.

Question 5

On an automated teller machine (ATM) belonging to USA Bank, Sven placed a card-skimming device to pull information from the magnetic strips of users' debit cards. The device then transmitted the stolen data to thieves who used it to gain access to, and empty, the bank accounts of the users, including Megan. Megan learned of the theft the next day and promptly notified USA. Is Megan entitled to a recredit of her account for the most of the loss due to the theft? Explain.

Accepted Answer

The answer of On an automated teller machine (ATM) belonging...

Question 6

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​

Accepted Answer

A)  ​effective if an innocent third party accepts the check. 
B)  ​effective to the degree that it matches Caleb's genuine signature. 
C)  ​effective to the extent that Downtown Bank debits Caleb's account. 
D)  ​not effective.

Question 7

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.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Misty's debit card, issued by National United Bank, is stolen and used without her permission. She tells the bank within thirty days. She may be required to pay no more than​

Accepted Answer

A)  ​$5. 
B)  ​$50. 
C)  ​$500. 
D)  ​$5,000.

Question 10

Ian buys a phone in Jiffy Mart, using the means that accounts for more retail payments than any other. This means of payment is​

Accepted Answer

A)  ​a commercial check. 
B)  ​a debit card. 
C)  ​a personal check. 
D)  ​cash.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Drew signs a check "pay to the order of Eastern State University" drawn on Drew's account in Fidelity Bank to pay her tuition. Drew is​

Accepted Answer

A)  ​none of the choices. 
B)  ​the drawee. 
C)  ​the drawer. 
D)  ​the payee.

Question 13

Clyde issues a check payable to Discount Mart. Ethel, Discount's cashier, forges the store's indorsement and deposits the check in her bank account. Clyde's bank, Farmers State Bank, pays the check. Clyde can recover from​

Accepted Answer

A)  ​Ethel, but not the bank. 
B)  ​the bank, which cannot recover from Ethel. 
C)  ​the bank, which can recover from Ethel. 
D)  ​neither Ethel nor the bank.

Question 14

Faye forges Greta's signature on a check "payable to the order of Faye" drawn on Greta's account in Hearthside Bank. Most likely, if the bank pays the check​

Accepted Answer

A)  ​the Federal Reserve will reimburse all parties for their costs. 
B)  ​the loss will be apportioned among all of the bank's customers. 
C)  ​Greta will be liable for the amount. 
D)  ​the bank will have to recredit Greta's account.

Question 15

Any local check deposited must be available for withdrawal by check or as cash within one business day from the date of deposit.

Accepted Answer

A) True 
 B)False

Question 16

A customer can stop payment on a check that has been certified or accepted by a bank.

Accepted Answer

A) True 
 B)False

Question 17

A bank's duty to honor its customer's check is subject to the stipulation that the account has sufficient funds to pay the check.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Joni writes Keizer an uncertified check for $500 drawn on Joni's account at Labor Employees Credit Union. Seven months later, Keizer presents the check for payment. The credit union pays the check in good faith without consulting Joni. The credit union​

Accepted Answer

A)  ​cannot charge Joni's account for any amount. 
B)  ​can charge Joni's account for $250 only. 
C)  ​can charge Joni's account for $500. 
D)  ​is liable for breach of contract.

Question 20

Gary writes a check drawn on Hilltop Bank for $400 "payable to Ivan" on May 1. Gary dies on May 3. Ivan presents the check to the bank on May 5. Unaware of Gary's death, the bank​

Accepted Answer

A)  ​must certify the check. 
B)  ​may pay the check. 
C)  ​must consult with Gary's heirs before paying the check. 
D)  ​can do nothing until Ivan claims an interest in the account.

Exam 18: Banking in the Digital Age

When processing a check, Sterling Bank encodes information, such as the amount of the check, on the item. Sterling thereby warrants to any subsequent bank or payor​

An agency relationship arises between the customer and the bank when the customer writes a check on his or her account.

Dhani signs a check "pay to the order of Eton" drawn on Dhani's account in Fidelity Guaranty Bank and dates the check "May 1." Eton presents the check to the bank for payment on December 15. This is​

State Bank agrees to accept a check by setting aside sufficient funds to cover the amount. This check is considered​

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​

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.

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

Misty's debit card, issued by National United Bank, is stolen and used without her permission. She tells the bank within thirty days. She may be required to pay no more than​

Ian buys a phone in Jiffy Mart, using the means that accounts for more retail payments than any other. This means of payment is​

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

Drew signs a check "pay to the order of Eastern State University" drawn on Drew's account in Fidelity Bank to pay her tuition. Drew is​

Clyde issues a check payable to Discount Mart. Ethel, Discount's cashier, forges the store's indorsement and deposits the check in her bank account. Clyde's bank, Farmers State Bank, pays the check. Clyde can recover from​

Faye forges Greta's signature on a check "payable to the order of Faye" drawn on Greta's account in Hearthside Bank. Most likely, if the bank pays the check​

Any local check deposited must be available for withdrawal by check or as cash within one business day from the date of deposit.

A customer can stop payment on a check that has been certified or accepted by a bank.

A bank's duty to honor its customer's check is subject to the stipulation that the account has sufficient funds to pay the check.

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

Joni writes Keizer an uncertified check for $500 drawn on Joni's account at Labor Employees Credit Union. Seven months later, Keizer presents the check for payment. The credit union pays the check in good faith without consulting Joni. The credit union​

Gary writes a check drawn on Hilltop Bank for $400 "payable to Ivan" on May 1. Gary dies on May 3. Ivan presents the check to the bank on May 5. Unaware of Gary's death, the bank​

When processing a check, Sterling Bank encodes information, such as the amount of the check, on the item. Sterling thereby warrants to any subsequent bank or payor

Dhani signs a check "pay to the order of Eton" drawn on Dhani's account in Fidelity Guaranty Bank and dates the check "May 1." Eton presents the check to the bank for payment on December 15. This is

State Bank agrees to accept a check by setting aside sufficient funds to cover the amount. This check is considered

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

Misty's debit card, issued by National United Bank, is stolen and used without her permission. She tells the bank within thirty days. She may be required to pay no more than

Ian buys a phone in Jiffy Mart, using the means that accounts for more retail payments than any other. This means of payment is

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

Clyde issues a check payable to Discount Mart. Ethel, Discount's cashier, forges the store's indorsement and deposits the check in her bank account. Clyde's bank, Farmers State Bank, pays the check. Clyde can recover from

Faye forges Greta's signature on a check "payable to the order of Faye" drawn on Greta's account in Hearthside Bank. Most likely, if the bank pays the check

Joni writes Keizer an uncertified check for $500 drawn on Joni's account at Labor Employees Credit Union. Seven months later, Keizer presents the check for payment. The credit union pays the check in good faith without consulting Joni. The credit union

Gary writes a check drawn on Hilltop Bank for $400 "payable to Ivan" on May 1. Gary dies on May 3. Ivan presents the check to the bank on May 5. Unaware of Gary's death, the bank