Question 1

On Monday,Eve deposits in her account at Fiscal Bank a local check for $500.After 5:00 p.m.on Friday,from these funds,Eve can withdraw no more than

Accepted Answer

A) $100. 
B) $400. 
C) $500. 
D) $600.

Question 2

A financial institution must encode a returned check with certain information.

Accepted Answer

A) True 
 B)False

Question 3

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 4

A bank that encodes information on an item after its issue warrants to any subsequent bank that the information is correct.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) a cashier's check. 
B) a certified check. 
C) a trade acceptance. 
D) a traveler's check.

Question 6

Paris knowingly divulges to Media Exposure magazine information about Randy's e-money payments to City Bank.The payments were in transmission to City Bank when Paris,without the consent of Randy or City Bank,discovered and revealed them.This may be a violation of

Accepted Answer

A) the Electronic Communications Privacy Act. 
B) the Federal Reserve Board's Regulation E. 
C) the Right to Financial Privacy Act. 
D) the Uniform Electronic Transactions Act.

Question 7

A bank that fails to detect an alteration to its customer's check is liable to the customer for the loss.

Accepted Answer

A) True 
 B)False

Question 8

A check is a special type of certificate of deposit.

Accepted Answer

A) True 
 B)False

Question 9

A bank that has certified a check is under no obligation to accept it.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) a commercial check. 
B) a debit card. 
C) a personal check. 
D) a trade acceptance.

Question 11

A bank cannot recover from a holder who cashes a check bearing a forged indorsement once the bank has accepted and paid the item.

Accepted Answer

A) True 
 B)False

Question 12

Stored-value cards are a form of digital cash.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) a dishonored check. 
B) an overdraft. 
C) a postdated check. 
D) a stale check.

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Guaranty Bank receives a check drawn on the account of Get-Rich Industries,Inc.,one of the bank's customers,at 3 p.m.Friday.Garry,the presenter of the check,is not one of the bank's customers.The bank uses deferred posting with a 2 p.m.cutoff hour.If it decides to dishonor the check,it must do so by midnight

Accepted Answer

A) Saturday. 
B) Sunday. 
C) Monday. 
D) Tuesday.

Question 18

Thelma signs a check "pay to the order of Uri" drawn on Thelma's account in Verity Bank.Thelma has $400 in her account but the amount of the check is $500,which the bank pays.This is

Accepted Answer

A) a dishonored check. 
B) an overdraft. 
C) a postdated check. 
D) a stale check.

Question 19

Certified checks are instruments that have been accepted for payment by the institutions on which they are drawn.

Accepted Answer

A) True 
 B)False

Question 20

Pat,the manager of Quik Mart,deposits the store's receipts in its account at Regional Bank.As to the receipts,the relationship between Quik Mart and the bank is

Accepted Answer

A) attorney and client. 
B) creditor and debtor. 
C) guardian and ward. 
D) trustee and beneficiary.

Exam 23: Checks and Banking in the Digital Age

On Monday,Eve deposits in her account at Fiscal Bank a local check for $500.After 5:00 p.m.on Friday,from these funds,Eve can withdraw no more than

A financial institution must encode a returned check with certain information.

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

A bank that encodes information on an item after its issue warrants to any subsequent bank that the information is correct.

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

Paris knowingly divulges to Media Exposure magazine information about Randy's e-money payments to City Bank.The payments were in transmission to City Bank when Paris,without the consent of Randy or City Bank,discovered and revealed them.This may be a violation of

A bank that fails to detect an alteration to its customer's check is liable to the customer for the loss.

A check is a special type of certificate of deposit.

A bank that has certified a check is under no obligation to accept it.

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

A bank cannot recover from a holder who cashes a check bearing a forged indorsement once the bank has accepted and paid the item.

Stored-value cards are a form of digital cash.

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

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

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

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

Thelma signs a check "pay to the order of Uri" drawn on Thelma's account in Verity Bank.Thelma has $400 in her account but the amount of the check is $500,which the bank pays.This is

Certified checks are instruments that have been accepted for payment by the institutions on which they are drawn.

Pat,the manager of Quik Mart,deposits the store's receipts in its account at Regional Bank.As to the receipts,the relationship between Quik Mart and the bank is