Question 1

________ of the Uniform Commercial Code establishes rules that regulate the creation and collection of and liability for wire transfers.

Accepted Answer

A)  Article 3 
B)  Article 4 
C)  Article 4A 
D)  Article 5 
A)  Article 3 
B)  Article 4 
C)  Article 4A 
D)  Article 5

Question 2

Checks are the most common form of negotiable instrument used in the United States.

Accepted Answer

A) True 
 B)False

Question 3

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

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 4

In which of the following cases is a bank considered liable for unauthorized payments?

Accepted Answer

A)  if the bank does not attach canceled checks to the monthly statements of account 
B)  if the bank does not provide images of paid checks online 
C)  if the bank destroys original copies of canceled checks not sent to customers after seven years from the date of the check 
D)  if the bank does not provide sufficient information on checks paid to customers in their monthly account statements 
A)  if the bank does not attach canceled checks to the monthly statements of account 
B)  if the bank does not provide images of paid checks online 
C)  if the bank destroys original copies of canceled checks not sent to customers after seven years from the date of the check 
D)  if the bank does not provide sufficient information on checks paid to customers in their monthly account statements

Question 5

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 6

A check issued by a bank for which the customer has paid the bank the amount of the check and a fee is called a(n)________ check.

Accepted Answer

A)  certified 
B)  stale 
C)  cashier's 
D)  ordinary 
A)  certified 
B)  stale 
C)  cashier's 
D)  ordinary

Question 7

Article 4A of the UCC establishes rules regulating the creation and collection of and liability for wire transfers.

Accepted Answer

A) True 
 B)False

Question 8

What are debit cards? Explain,in brief,the series of events triggered by the loss of a debit card.

Accepted Answer

Debit cards are electronically connected

Question 9

Explain,in brief,the qualities of a certified check.

Accepted Answer

When a bank certifies a check,it agrees

Question 10

Instead of depositing an "on them" check for collection,a depositor can physically submit the check for payment at the payer bank.This is called ________.

Accepted Answer

A)  provisional credit 
B)  indorsement of the check 
C)  presentment across the counter 
D)  final settlement 
A)  provisional credit 
B)  indorsement of the check 
C)  presentment across the counter 
D)  final settlement

Question 11

A check that a drawer does not want cashed until sometime in the future is called a(n)________ check.

Accepted Answer

A)  ordinary 
B)  stale 
C)  certified 
D)  postdated 
A)  ordinary 
B)  stale 
C)  certified 
D)  postdated

Question 12

The ________ is a federal statute,enacted by the Congress in 2010,which reorganizes federal government supervision of the banking system,regulates previous unregulated financial products and institutions,and adds a new consumer protection agency to protect consumers from abusive lending and banking practices.

Accepted Answer

A)  Dodd-Frank Wall Street Reform and Consumer Protection Act 
B)  Depository Institutions Deregulation and Monetary Control Act 
C)  Financial Institutions Reform, Recovery, and Enforcement Act 
D)  Riegle-Neal Interstate Banking and Branching Efficiency Act 
A)  Dodd-Frank Wall Street Reform and Consumer Protection Act 
B)  Depository Institutions Deregulation and Monetary Control Act 
C)  Financial Institutions Reform, Recovery, and Enforcement Act 
D)  Riegle-Neal Interstate Banking and Branching Efficiency Act

Question 13

The Federal Reserve consists of 50 regional Federal Reserve banks located in major cities across the country.

Accepted Answer

A) True 
 B)False

Question 14

Francis Jeffers purchased a cashier's check in the amount of $5,000 from Northern Star Bank.The check was made payable to Kyle Naughton and was delivered to him.Twelve months later,the Northern Star Bank branch manager informed Jeffers that the cashier's check was still outstanding.Jeffers subsequently signed a form,requesting that payment be stopped and a replacement check be issued.Northern Star Bank issued a replacement check to Jeffers.Eight months later,Naughton deposited the original cashier's check in his bank,which was paid by Northern Star Bank.Northern Star Bank requested that Jeffers repay the bank $5,000.When he refused,Northern Star Bank sued Jeffers to recover this amount and the court awarded Northern Star Bank damages amounting to $5,500.Which of the following,had it happened,would have resulted in the court ruling in Jeffers' favor?

Accepted Answer

A)  Jeffers cashed the replacement check before Naughton had presented the original check at his bank. 
B)  Jeffers paid Naughton the $5,000 in cash after obtaining the replacement check from Northern Star Bank. 
C)  Jeffers indemnified Northern Star Bank for potential damages arising from the issue of the replacement check. 
D)  Jeffers renewed the stop-payment order on the original check at the end of six months. 
A)  Jeffers cashed the replacement check before Naughton had presented the original check at his bank. 
B)  Jeffers paid Naughton the $5,000 in cash after obtaining the replacement check from Northern Star Bank. 
C)  Jeffers indemnified Northern Star Bank for potential damages arising from the issue of the replacement check. 
D)  Jeffers renewed the stop-payment order on the original check at the end of six months.

Question 15

A postdated check must be accompanied by a ________.

Accepted Answer

A)  separate written notice to the bank 
B)  verbal request 
C)  proof of identification of all parties 
D)  written permission from the judiciary 
A)  separate written notice to the bank 
B)  verbal request 
C)  proof of identification of all parties 
D)  written permission from the judiciary

Question 16

The ________ of a check is the customer who maintains the checking account and writes checks against the account.

Accepted Answer

A)  drawer 
B)  drawee 
C)  payee 
D)  indorser 
A)  drawer 
B)  drawee 
C)  payee 
D)  indorser

Question 17

A bank's refusal to certify a check does not amount to the dishonor of the check.

Accepted Answer

A) True 
 B)False

Question 18

A check that has been modified without authorization and thus modifies the legal obligation of a party is known as a(n)________.

Accepted Answer

A)  stale check 
B)  incomplete check 
C)  altered check 
D)  forged check 
A)  stale check 
B)  incomplete check 
C)  altered check 
D)  forged check

Question 19

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires mortgage lenders to make a reasonable and good-faith determination that a borrower has the ability to repay the loan.

Accepted Answer

A) True 
 B)False

Question 20

Article 4 of the UCC sets forth the requirements for negotiable instruments,including checks.

Accepted Answer

A) True 
 B)False

Exam 22: Banking System and Electronic Financial Transactions

________ of the Uniform Commercial Code establishes rules that regulate the creation and collection of and liability for wire transfers.

Checks are the most common form of negotiable instrument used in the United States.

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

In which of the following cases is a bank considered liable for unauthorized payments?

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

A check issued by a bank for which the customer has paid the bank the amount of the check and a fee is called a(n)________ check.

Article 4A of the UCC establishes rules regulating the creation and collection of and liability for wire transfers.

What are debit cards? Explain,in brief,the series of events triggered by the loss of a debit card.

Explain,in brief,the qualities of a certified check.

Instead of depositing an "on them" check for collection,a depositor can physically submit the check for payment at the payer bank.This is called ________.

A check that a drawer does not want cashed until sometime in the future is called a(n)________ check.

The Federal Reserve consists of 50 regional Federal Reserve banks located in major cities across the country.

A postdated check must be accompanied by a ________.

The ________ of a check is the customer who maintains the checking account and writes checks against the account.

A bank's refusal to certify a check does not amount to the dishonor of the check.

A check that has been modified without authorization and thus modifies the legal obligation of a party is known as a(n)________.

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires mortgage lenders to make a reasonable and good-faith determination that a borrower has the ability to repay the loan.

Article 4 of the UCC sets forth the requirements for negotiable instruments,including checks.

Legal Heritage and the Digital Age

Constitutional Law for Business and E-commerce

Courts and Jurisdiction

Judicial Alternative Administrative and E-Dispute Resolution

Intentional Torts and Negligence

Criminal Law and Cyber Crimes

Intellectual Property and Cyber Piracy

Ethics and Social Responsibility of Business

Nature of Traditional and E-Contracts

Agreement and Consideration

Capacity and Legality

Genuineness of Assent and Statute of Frauds

Third-Party Rights and Discharge

Breach of Contract and Remedies

Digital Law and E-Commerce

Formation of Sales and Lease Contracts

Title to Goods and Risk of Loss

Remedies for Breach of Sales and Lease Contracts

Warranties and Product Liability

Creation and Transfer of Negotiable Instruments

Holder in Due Course and Liability of Parties

Credit, Real Property Financing, and Secured Transactions

Bankruptcy and Reorganization

Agency law

Small Business, Entrepreneurship, and Partnerships

Corporate Formation and Financing

Corporate Governance and the Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Companies and Limited Liability Partnerships

Franchise and Special Forms of Business

Investor Protection, E-Securities, and Wall Street Reform

Antitrust Law and Unfair Trade Practices

Consumer Safety and Environmental Protection

Labor, Worker Protection, and Immigration Laws

Equal Opportunity in Employment

Personal Property, Bailment, and Insurance

Real Property, Landlord-Tenant Law, and Land Use Regulation

Family Law, Wills, and Trusts

Accountants' Duties and Liability

International and World Trade Law

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