Question 1

The Uniform Commercial Code places the risk of loss of an incomplete item on the drawee.

Accepted Answer

A) True 
 B)False  False

Question 2

If a bank does not honor a check when there are sufficient funds in the drawer's account to pay a properly payable check, it is liable for wrongful dishonor.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following regulatory agencies was set up under the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act?

Accepted Answer

A) Federal Deposit Insurance Corporation 
B) Bureau of Consumer Financial Protection 
C) National Credit Union Administration 
D) U)S.Securities and Exchange Commission 
A) Federal Deposit Insurance Corporation 
B) Bureau of Consumer Financial Protection 
C) National Credit Union Administration 
D) U)S.Securities and Exchange Commission B

Question 4

A check that has been outstanding for more than three months is considered stale, and the bank is under no obligation to pay it.

Accepted Answer

A) True 
 B)False

Question 5

The Federal Deposit Insurance Corporation was created under the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Accepted Answer

A) True 
 B)False

Question 6

What responsibility do banks and checking account customers have with respect to examining bank statements?

Accepted Answer

Ordinarily, banks send their checking ac

Question 7

Raj receives a check for $100 from Sheldon.He signs the back of the check and turns it over to Leo to pay off the $100 he owed Leo.
-The check is now said to be ________.

Accepted Answer

A) certified 
B) indorsed 
C) drawn 
D) stale 
A) certified 
B) indorsed 
C) drawn 
D) stale

Question 8

Which of the following describes the "deferred posting rule"?

Accepted Answer

A) Banks can fix an afternoon hour of 2:00 or later as a cutoff hour for the purpose of processing checks and deposits. 
B) When a customer deposits a check for collection, the depository bank does not have to pay the customer until the check clears. 
C) Banks have to mail their checking account customers monthly statements of their accounts and any canceled checks should accompany this statement. 
D) A customer is liable for payment to his bank if he fails to report any unauthorized transactions within 30 days from the receipt of the account statement. 
A) Banks can fix an afternoon hour of 2:00 or later as a cutoff hour for the purpose of processing checks and deposits. 
B) When a customer deposits a check for collection, the depository bank does not have to pay the customer until the check clears. 
C) Banks have to mail their checking account customers monthly statements of their accounts and any canceled checks should accompany this statement. 
D) A customer is liable for payment to his bank if he fails to report any unauthorized transactions within 30 days from the receipt of the account statement.

Question 9

In which of the following cases is a bank obliged to file a Currency Transaction Report (CTR)with the Internal Revenue Service?

Accepted Answer

A) The bank receives instructions from a customer to certify an ordinary check worth $10, 000 issued in a foreigner's name. 
B) The bank receives an ordinary check worth $13, 000 payable to a customer's checking account. 
C) A customer deposits $20, 000 through a cashier's check in his checking account. 
D) A customer issues stop-payment instructions on a check worth $15, 000 issued to a payee. 
A) The bank receives instructions from a customer to certify an ordinary check worth $10, 000 issued in a foreigner's name. 
B) The bank receives an ordinary check worth $13, 000 payable to a customer's checking account. 
C) A customer deposits $20, 000 through a cashier's check in his checking account. 
D) A customer issues stop-payment instructions on a check worth $15, 000 issued to a payee.

Question 10

The payer bank cannot charge the customer's account if it pays a check over the forged signature.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is one of the purposes of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010?

Accepted Answer

A) monitoring the legitimacy of consumer and commercial wire transfers 
B) establishing the reporting requirements for financial transactions, including off-balance-sheet transactions 
C) regulating previously unregulated financial products and institutions 
D) overseeing, inspecting, and disciplining accounting firms in their roles as auditors of public companies 
A) monitoring the legitimacy of consumer and commercial wire transfers 
B) establishing the reporting requirements for financial transactions, including off-balance-sheet transactions 
C) regulating previously unregulated financial products and institutions 
D) overseeing, inspecting, and disciplining accounting firms in their roles as auditors of public companies

Question 12

Under UCC guidelines, to require a bank to abide by a postdated check, the drawer must give separate written notice to the bank, describing the check with reasonable certainty and notifying the bank not to pay the check until the date on the check.

Accepted Answer

A) True 
 B)False

Question 13

The bank where the payee or holder of a check has an account is known as the ________.

Accepted Answer

A) payer bank 
B) depository bank 
C) intermediary bank 
D) private bank 
A) payer bank 
B) depository bank 
C) intermediary bank 
D) private bank

Question 14

Write a brief note describing certified checks.

Accepted Answer

When a bank certifies a check, it agrees

Question 15

Mrs.Dawson wrote a check to Kevin for $50 on New Year's Day for clearing the snow from her driveway on Christmas Eve.However, when Kevin tries to cash the check at Mrs.Dawson's bank, he is told that the check is stale.Which of the following is the most likely reason for Mrs.Dawson's check being dishonored by the bank?

Accepted Answer

A) Mrs.Dawson did not have enough funds in her checking account. 
B) Mrs.Dawson had dated the check for the previous year instead of the current year. 
C) Mrs.Dawson had not identified Kevin as the payee while writing out the check. 
D) Mrs.Dawson had given Kevin a check which was dated more than six months ahead of the date of issue. 
A) Mrs.Dawson did not have enough funds in her checking account. 
B) Mrs.Dawson had dated the check for the previous year instead of the current year. 
C) Mrs.Dawson had not identified Kevin as the payee while writing out the check. 
D) Mrs.Dawson had given Kevin a check which was dated more than six months ahead of the date of issue.

Question 16

Article 3 of the Uniform Commercial Code establishes the ________.

Accepted Answer

A) requirements for negotiable instruments, such as checks 
B) rules that regulate bank deposit procedures for checking accounts 
C) rules that regulate the creation and collection of and liability for wire transfers 
D) guidelines for ownership of securities by investors 
A) requirements for negotiable instruments, such as checks 
B) rules that regulate bank deposit procedures for checking accounts 
C) rules that regulate the creation and collection of and liability for wire transfers 
D) guidelines for ownership of securities by investors

Question 17

In banking terminology, a creditor-debtor relationship is created when ________.

Accepted Answer

A) a customer fails to maintain adequate funds in his bank checking account 
B) a customer makes a deposit into a bank 
C) a customer writes a check against his account 
D) a customer writes a postdated check drawn on his bank 
A) a customer fails to maintain adequate funds in his bank checking account 
B) a customer makes a deposit into a bank 
C) a customer writes a check against his account 
D) a customer writes a postdated check drawn on his bank

Question 18

The Federal Currency Reporting Law requires financial institutions and other entities to file a Currency Transaction Report (CTR)with the Internal Revenue Service (IRS)in the event of the detection of suspected criminal activity by bank customers involving a financial transaction of $1, 000 or more in funds.

Accepted Answer

A) True 
 B)False

Question 19

How is a cashier's check different from an ordinary check?

Accepted Answer

A) Cashier's checks can be postdated, but ordinary checks cannot be postdated. 
B) Unlike ordinary checks, cashier's checks do not require the purchaser to hold a checking account at that bank. 
C) Unlike ordinary checks, cashier's checks are cancellable negotiable instruments upon issue. 
D) Cashier's checks are three-party checks, while ordinary checks involve only two parties. 
A) Cashier's checks can be postdated, but ordinary checks cannot be postdated. 
B) Unlike ordinary checks, cashier's checks do not require the purchaser to hold a checking account at that bank. 
C) Unlike ordinary checks, cashier's checks are cancellable negotiable instruments upon issue. 
D) Cashier's checks are three-party checks, while ordinary checks involve only two parties.

Question 20

John writes out a check for $100 on his account at the Sacred Heart Bank to repay the $100 he owes Perry.He gives the check to Eliot and tells her to hand it over to Perry.However, Eliot loses the check before she can hand it to Perry.Later, John realizes that he had not written Perry's name on the lost check.According to the provisions of the UCC, on which of the following parties should the risk of loss of the check be placed?

Accepted Answer

A) Eliot 
B) Perry 
C) John 
D) Sacred Heart Bank 
A) Eliot 
B) Perry 
C) John 
D) Sacred Heart Bank

Exam 25: Banks, E-Money, and Financial Reform

The Uniform Commercial Code places the risk of loss of an incomplete item on the drawee.

If a bank does not honor a check when there are sufficient funds in the drawer's account to pay a properly payable check, it is liable for wrongful dishonor.

Which of the following regulatory agencies was set up under the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act?

A check that has been outstanding for more than three months is considered stale, and the bank is under no obligation to pay it.

The Federal Deposit Insurance Corporation was created under the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

What responsibility do banks and checking account customers have with respect to examining bank statements?

Raj receives a check for $100 from Sheldon.He signs the back of the check and turns it over to Leo to pay off the $100 he owed Leo. -The check is now said to be ________.

Which of the following describes the "deferred posting rule"?

In which of the following cases is a bank obliged to file a Currency Transaction Report (CTR)with the Internal Revenue Service?

The payer bank cannot charge the customer's account if it pays a check over the forged signature.

Which of the following is one of the purposes of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010?

Under UCC guidelines, to require a bank to abide by a postdated check, the drawer must give separate written notice to the bank, describing the check with reasonable certainty and notifying the bank not to pay the check until the date on the check.

The bank where the payee or holder of a check has an account is known as the ________.

Write a brief note describing certified checks.

Article 3 of the Uniform Commercial Code establishes the ________.

In banking terminology, a creditor-debtor relationship is created when ________.

How is a cashier's check different from an ordinary check?

Legal Heritage and the Digital Age

Courts and Jurisdiction

Judicial,Alternative,and E-Dispute Resolution

Constitutional Law for Business and E-Commerce

Intentional Torts and Negligence

Product and Strict Liability

Intellectual Property and Cyber Piracy

Criminal Law and Cyber Crimes

Nature of Traditional and E-Contracts

Agreement

Consideration and Promissory Estoppel

Capacity and Legality

Genuineness of Assent and Undue Influence

Statute of Frauds and Equitable Exceptions

Third-Party Rights and Discharge

Remedies for Breach of Traditional and E-Contracts

E-Commerce and Digital Law

Formation of Sales and Lease Contracts

Title to Goods and Risk of Loss

Remedies for Breach of Sales and Lease Contracts

Warranties

Creation of Negotiable Instruments

Holder in Due Course and Transferability

Liability, Defenses, and Discharge

Credit,Mortgages,and Debtor's Rights

Secured Transactions and E-Filing

Bankruptcy and Reorganization

Agency Formation and Termination

Liability of Principals, Agents, and Independent Contractors

Employment, Worker Protection, and Immigration Law

Labor Law and Collective Bargaining

Equal Opportunity in Employment

Small Business, Entrepreneurship, and General Partnerships

Limited Partnerships and Special Partnerships

Corporate Formation and Financing

Corporate Governance and the Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Companies and Limited Liability Partnerships

Franchises and Special Forms of Businesses

Investor Protection, E-Securities, and Wall Street Reform

Ethics and Social Responsibility of Business

Administrative Law and Regulatory Agencies

Consumer Protection and Product Safety

Environmental Protection

Antitrust Law and Unfair Trade Practices

Personal Property and Bailment

Real Property

Landlord-Tenant Law and Land Use Regulation

Insurance

Accountants' Duties and Liability

Wills Trusts and Estates

Family Law

International and World Trade Law

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