Exam 27: Bank Deposits Collections and Funds Transfers

Electronic funds transfers are beneficial to banks because they eliminate the float time that a drawer enjoys on a checking account and the paperwork involved in processing checks.

Lane Co. instructs its bank, Second Street Bank, to pay $200,000 to Moffett, Inc., also a customer of Second Street Bank. The bank executes the payment order by crediting Moffett's account with the $200,000 and notifying Moffett that the credit was made and is available. In this case:

Mary receives her monthly bank statement on December 30th. She looks at it quickly, then sets it aside. Three days later, she examines it again and discovers a forged check. What must she do to avoid responsibility for the check?

The Check Clearing for the 21st Century Act requires banks to accept checks in electronic form.