Question 1

Match each statement with the correct term below.
-accommodation party

Accepted Answer

A) An order to pay a fixed sum of money, signed by a drawer, payable on demand or at a definite time. 
B) A specialized form of draft; an order to pay money drawn on a bank and payable on demand. 
C) Legal concept that makes written instruments freely transferable and therefore a readily accepted substitute for money. 
D) Paper that is payable to the possessor of an instrument; a check that is made payable to cash or that is indorsed in blank. 
E) A person who is in possession of an instrument drawn, issued, or indorsed to him or to his order, or to bearer or in blank.
F)A signature on an instrument that specifies no indorsee and may consist of merely the signature of the indorser or her authorized agent.
G)Issuer of a promissory note or Cd.
H)A written acknowledgement by a bank of the receipt of money that it promises to repay, with interest at a stated rate; a specialized form of promise to pay money that is given by a bank.
I)A person or organization to whom a draft is directed, and who is ordered to pay the amount of money specified therein; the bank on which a check is drawn.
J)Issuer of a check or draft.
K)A signature on an instrument that attempts to limit the rights of the indorsee in some fashion.
L)Signature that identifies an indorsee to be paid; makes the instrument order paper.
M)Oral, written, or electronic instruction to a receiving bank to pay or to cause another bank to pay a fixed amount of money to a beneficiary.
N)Contractual protections from liability good against holders but not against holders in due course.
O)An instrument involving two parties, one of whom promises to pay to the order of the second a stated sum of money either on demand or at a stated future date.
P)Person who signs an instrument to lend her credit to another party to the instrument.
Q)The transferee of a holder in due course succeeds to the rights of a holder in due course even if the transferee does not qualify for holder in due course status.
R)The first bank into which an item is deposited for collection.
S)Demand for payment or acceptance of an instrument.
T)Acceptance of a check by a bank.
U)Protections from liability good against all holders, including holders in due course.
V)Piece of paper, which may contain an indorsement, that is affixed to an instrument. 
A) An order to pay a fixed sum of money, signed by a drawer, payable on demand or at a definite time. 
B) A specialized form of draft; an order to pay money drawn on a bank and payable on demand. 
C) Legal concept that makes written instruments freely transferable and therefore a readily accepted substitute for money. 
D) Paper that is payable to the possessor of an instrument; a check that is made payable to cash or that is indorsed in blank. 
E) A person who is in possession of an instrument drawn, issued, or indorsed to him or to his order, or to bearer or in blank.
F)A signature on an instrument that specifies no indorsee and may consist of merely the signature of the indorser or her authorized agent.
G)Issuer of a promissory note or Cd.
H)A written acknowledgement by a bank of the receipt of money that it promises to repay, with interest at a stated rate; a specialized form of promise to pay money that is given by a bank.
I)A person or organization to whom a draft is directed, and who is ordered to pay the amount of money specified therein; the bank on which a check is drawn.
J)Issuer of a check or draft.
K)A signature on an instrument that attempts to limit the rights of the indorsee in some fashion.
L)Signature that identifies an indorsee to be paid; makes the instrument order paper.
M)Oral, written, or electronic instruction to a receiving bank to pay or to cause another bank to pay a fixed amount of money to a beneficiary.
N)Contractual protections from liability good against holders but not against holders in due course.
O)An instrument involving two parties, one of whom promises to pay to the order of the second a stated sum of money either on demand or at a stated future date.
P)Person who signs an instrument to lend her credit to another party to the instrument.
Q)The transferee of a holder in due course succeeds to the rights of a holder in due course even if the transferee does not qualify for holder in due course status.
R)The first bank into which an item is deposited for collection.
S)Demand for payment or acceptance of an instrument.
T)Acceptance of a check by a bank.
U)Protections from liability good against all holders, including holders in due course.
V)Piece of paper, which may contain an indorsement, that is affixed to an instrument.

Question 2

An association of banks and other payors whose members settle accounts with each other on a daily basis is a:

Accepted Answer

A) payor banking group. 
B) clearinghouse. 
C) provisional reserve. 
D) None of the above. 
A) payor banking group. 
B) clearinghouse. 
C) provisional reserve. 
D) None of the above.

Question 3

Doug takes a $500 check drawn by Gail to Gail's drawee bank to cash it.Gail has over $10,000 on deposit in her account.If her bank refuses to pay Doug:

Accepted Answer

A) Doug can sue the bank and demand payment. 
B) if the check is over 30 days old, the bank has a right to refuse payment. 
C) the bank has incurred a liability to Gail for its improper refusal to pay the check. 
D) All of the above. 
A) Doug can sue the bank and demand payment. 
B) if the check is over 30 days old, the bank has a right to refuse payment. 
C) the bank has incurred a liability to Gail for its improper refusal to pay the check. 
D) All of the above.

Question 4

UCC Articles 3 and 8 often apply to a bank collection problem.

Accepted Answer

A) True 
 B)False

Question 5

The relationship between the payor bank and its checking account customer is exclusively governed by statute and leaves no room for contractual modifications.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is true of a collecting bank?

Accepted Answer

A) A collecting bank is an agent of the owner of an item until settlement becomes final. 
B) The relationship between a collecting bank and the owner of an item, once settled, becomes a debtor-creditor relationship. 
C) A collecting bank may be a sub-agent of the owner until settlement becomes final. 
D) All of the above. 
E) None of the above. 
A) A collecting bank is an agent of the owner of an item until settlement becomes final. 
B) The relationship between a collecting bank and the owner of an item, once settled, becomes a debtor-creditor relationship. 
C) A collecting bank may be a sub-agent of the owner until settlement becomes final. 
D) All of the above. 
E) None of the above.

Question 7

A check is drawn on Jones Bank by Tamara and made payable to the order of Chris.Chris indorses it "for deposit only,Acct.2275,Chris" and gives it to Plainer Bank for deposit.Plainer stamps "pay any bank" on the check along with its indorsement and negotiates it to Stone Bank.Stone Bank simply stamps "Stone Bank" and negotiates it to SmallTown Bank.If SmallTown wants to negotiate it to the electric company to pay its bill,can it?

Accepted Answer

A) Yes, because the restrictive indorsement only applied to earlier indorsees. 
B) Yes, because the bank was not responsible for checking more than one indorsement. 
C) No, because an item restrictively indorsed with words such as "pay any bank" is locked into the bank collection system. 
D) No, because the bank must issue its own check for its own bills. 
A) Yes, because the restrictive indorsement only applied to earlier indorsees. 
B) Yes, because the bank was not responsible for checking more than one indorsement. 
C) No, because an item restrictively indorsed with words such as "pay any bank" is locked into the bank collection system. 
D) No, because the bank must issue its own check for its own bills.

Question 8

If a drawer files a stop payment order on a check,he is automatically relieved of liability for the obligation.

Accepted Answer

A) True 
 B)False

Question 9

The duty of care exercised by a collecting bank in handling an item transferred to it for collection does not include:

Accepted Answer

A) taking care in presenting the item. 
B) that it must act within a reasonable time after receipt of the bank item. 
C) taking care in routing. 
D) taking care in selecting intermediary banks. 
E) All of the above are duties of care of collecting banks. 
A) taking care in presenting the item. 
B) that it must act within a reasonable time after receipt of the bank item. 
C) taking care in routing. 
D) taking care in selecting intermediary banks. 
E) All of the above are duties of care of collecting banks.

Question 10

A check drawn on a bank is an order to pay a sum of money and an authorization to charge the amount to the drawer's account.The drawer may countermand this order by which of the following?

Accepted Answer

A) A canceled check. 
B) A stop payment order. 
C) A banker's acceptance. 
D) A time draft. 
A) A canceled check. 
B) A stop payment order. 
C) A banker's acceptance. 
D) A time draft.

Question 11

The Competitive Equality Banking Act:

Accepted Answer

A) allowed intermediary banks to become clearinghouses. 
B) includes a requirement that collecting banks give provisional credit to its subagents. 
C) has expedited the availability of funds. 
D) None of the above. 
A) allowed intermediary banks to become clearinghouses. 
B) includes a requirement that collecting banks give provisional credit to its subagents. 
C) has expedited the availability of funds. 
D) None of the above.

Question 12

Match each statement with the correct term below.
-blank indorsement

Accepted Answer

A) An order to pay a fixed sum of money, signed by a drawer, payable on demand or at a definite time. 
B) A specialized form of draft; an order to pay money drawn on a bank and payable on demand. 
C) Legal concept that makes written instruments freely transferable and therefore a readily accepted substitute for money. 
D) Paper that is payable to the possessor of an instrument; a check that is made payable to cash or that is indorsed in blank. 
E) A person who is in possession of an instrument drawn, issued, or indorsed to him or to his order, or to bearer or in blank.
F)A signature on an instrument that specifies no indorsee and may consist of merely the signature of the indorser or her authorized agent.
G)Issuer of a promissory note or Cd.
H)A written acknowledgement by a bank of the receipt of money that it promises to repay, with interest at a stated rate; a specialized form of promise to pay money that is given by a bank.
I)A person or organization to whom a draft is directed, and who is ordered to pay the amount of money specified therein; the bank on which a check is drawn.
J)Issuer of a check or draft.
K)A signature on an instrument that attempts to limit the rights of the indorsee in some fashion.
L)Signature that identifies an indorsee to be paid; makes the instrument order paper.
M)Oral, written, or electronic instruction to a receiving bank to pay or to cause another bank to pay a fixed amount of money to a beneficiary.
N)Contractual protections from liability good against holders but not against holders in due course.
O)An instrument involving two parties, one of whom promises to pay to the order of the second a stated sum of money either on demand or at a stated future date.
P)Person who signs an instrument to lend her credit to another party to the instrument.
Q)The transferee of a holder in due course succeeds to the rights of a holder in due course even if the transferee does not qualify for holder in due course status.
R)The first bank into which an item is deposited for collection.
S)Demand for payment or acceptance of an instrument.
T)Acceptance of a check by a bank.
U)Protections from liability good against all holders, including holders in due course.
V)Piece of paper, which may contain an indorsement, that is affixed to an instrument. 
A) An order to pay a fixed sum of money, signed by a drawer, payable on demand or at a definite time. 
B) A specialized form of draft; an order to pay money drawn on a bank and payable on demand. 
C) Legal concept that makes written instruments freely transferable and therefore a readily accepted substitute for money. 
D) Paper that is payable to the possessor of an instrument; a check that is made payable to cash or that is indorsed in blank. 
E) A person who is in possession of an instrument drawn, issued, or indorsed to him or to his order, or to bearer or in blank.
F)A signature on an instrument that specifies no indorsee and may consist of merely the signature of the indorser or her authorized agent.
G)Issuer of a promissory note or Cd.
H)A written acknowledgement by a bank of the receipt of money that it promises to repay, with interest at a stated rate; a specialized form of promise to pay money that is given by a bank.
I)A person or organization to whom a draft is directed, and who is ordered to pay the amount of money specified therein; the bank on which a check is drawn.
J)Issuer of a check or draft.
K)A signature on an instrument that attempts to limit the rights of the indorsee in some fashion.
L)Signature that identifies an indorsee to be paid; makes the instrument order paper.
M)Oral, written, or electronic instruction to a receiving bank to pay or to cause another bank to pay a fixed amount of money to a beneficiary.
N)Contractual protections from liability good against holders but not against holders in due course.
O)An instrument involving two parties, one of whom promises to pay to the order of the second a stated sum of money either on demand or at a stated future date.
P)Person who signs an instrument to lend her credit to another party to the instrument.
Q)The transferee of a holder in due course succeeds to the rights of a holder in due course even if the transferee does not qualify for holder in due course status.
R)The first bank into which an item is deposited for collection.
S)Demand for payment or acceptance of an instrument.
T)Acceptance of a check by a bank.
U)Protections from liability good against all holders, including holders in due course.
V)Piece of paper, which may contain an indorsement, that is affixed to an instrument.

Question 13

Match each statement with the correct term below.
-drawee

Accepted Answer

A) An order to pay a fixed sum of money, signed by a drawer, payable on demand or at a definite time. 
B) A specialized form of draft; an order to pay money drawn on a bank and payable on demand. 
C) Legal concept that makes written instruments freely transferable and therefore a readily accepted substitute for money. 
D) Paper that is payable to the possessor of an instrument; a check that is made payable to cash or that is indorsed in blank. 
E) A person who is in possession of an instrument drawn, issued, or indorsed to him or to his order, or to bearer or in blank.
F)A signature on an instrument that specifies no indorsee and may consist of merely the signature of the indorser or her authorized agent.
G)Issuer of a promissory note or Cd.
H)A written acknowledgement by a bank of the receipt of money that it promises to repay, with interest at a stated rate; a specialized form of promise to pay money that is given by a bank.
I)A person or organization to whom a draft is directed, and who is ordered to pay the amount of money specified therein; the bank on which a check is drawn.
J)Issuer of a check or draft.
K)A signature on an instrument that attempts to limit the rights of the indorsee in some fashion.
L)Signature that identifies an indorsee to be paid; makes the instrument order paper.
M)Oral, written, or electronic instruction to a receiving bank to pay or to cause another bank to pay a fixed amount of money to a beneficiary.
N)Contractual protections from liability good against holders but not against holders in due course.
O)An instrument involving two parties, one of whom promises to pay to the order of the second a stated sum of money either on demand or at a stated future date.
P)Person who signs an instrument to lend her credit to another party to the instrument.
Q)The transferee of a holder in due course succeeds to the rights of a holder in due course even if the transferee does not qualify for holder in due course status.
R)The first bank into which an item is deposited for collection.
S)Demand for payment or acceptance of an instrument.
T)Acceptance of a check by a bank.
U)Protections from liability good against all holders, including holders in due course.
V)Piece of paper, which may contain an indorsement, that is affixed to an instrument. 
A) An order to pay a fixed sum of money, signed by a drawer, payable on demand or at a definite time. 
B) A specialized form of draft; an order to pay money drawn on a bank and payable on demand. 
C) Legal concept that makes written instruments freely transferable and therefore a readily accepted substitute for money. 
D) Paper that is payable to the possessor of an instrument; a check that is made payable to cash or that is indorsed in blank. 
E) A person who is in possession of an instrument drawn, issued, or indorsed to him or to his order, or to bearer or in blank.
F)A signature on an instrument that specifies no indorsee and may consist of merely the signature of the indorser or her authorized agent.
G)Issuer of a promissory note or Cd.
H)A written acknowledgement by a bank of the receipt of money that it promises to repay, with interest at a stated rate; a specialized form of promise to pay money that is given by a bank.
I)A person or organization to whom a draft is directed, and who is ordered to pay the amount of money specified therein; the bank on which a check is drawn.
J)Issuer of a check or draft.
K)A signature on an instrument that attempts to limit the rights of the indorsee in some fashion.
L)Signature that identifies an indorsee to be paid; makes the instrument order paper.
M)Oral, written, or electronic instruction to a receiving bank to pay or to cause another bank to pay a fixed amount of money to a beneficiary.
N)Contractual protections from liability good against holders but not against holders in due course.
O)An instrument involving two parties, one of whom promises to pay to the order of the second a stated sum of money either on demand or at a stated future date.
P)Person who signs an instrument to lend her credit to another party to the instrument.
Q)The transferee of a holder in due course succeeds to the rights of a holder in due course even if the transferee does not qualify for holder in due course status.
R)The first bank into which an item is deposited for collection.
S)Demand for payment or acceptance of an instrument.
T)Acceptance of a check by a bank.
U)Protections from liability good against all holders, including holders in due course.
V)Piece of paper, which may contain an indorsement, that is affixed to an instrument.

Question 14

Which of the following is true about UCC Article 4A?

Accepted Answer

A) It is designed to overlap coverage of the Electronic Funds Transfer Act. 
B) It covers both credit and debit transactions. 
C) It covers wholesale funds transfers. 
D) It does not allow parties to vary their rights and obligations by agreement. 
A) It is designed to overlap coverage of the Electronic Funds Transfer Act. 
B) It covers both credit and debit transactions. 
C) It covers wholesale funds transfers. 
D) It does not allow parties to vary their rights and obligations by agreement.

Question 15

If you lose your wallet along with your ATM card,your liability is

Accepted Answer

A) unlimited unless you notify the bank within 30 days. 
B) limited to $200 if you notify the bank within two days. 
C) limited to $50 if you notify the bank within two days. 
D) limited to $500 if you notify the bank within 60 days. 
A) unlimited unless you notify the bank within 30 days. 
B) limited to $200 if you notify the bank within two days. 
C) limited to $50 if you notify the bank within two days. 
D) limited to $500 if you notify the bank within 60 days.

Question 16

Barry presents to Wake Bank for deposit in his account a check for $100 made out to him by Richard.Wake Bank provisionally credits Barry's account on Monday.When is payment final?

Accepted Answer

A) Automatically at the end of the third business day. 
B) Midnight Tuesday. 
C) When the amount of the check is collected from Richard's bank. 
D) When Richard's bank receives the check. 
A) Automatically at the end of the third business day. 
B) Midnight Tuesday. 
C) When the amount of the check is collected from Richard's bank. 
D) When Richard's bank receives the check.

Question 17

Match each statement with the correct term below.
-certificate of deposit

Accepted Answer

A) An order to pay a fixed sum of money, signed by a drawer, payable on demand or at a definite time. 
B) A specialized form of draft; an order to pay money drawn on a bank and payable on demand. 
C) Legal concept that makes written instruments freely transferable and therefore a readily accepted substitute for money. 
D) Paper that is payable to the possessor of an instrument; a check that is made payable to cash or that is indorsed in blank. 
E) A person who is in possession of an instrument drawn, issued, or indorsed to him or to his order, or to bearer or in blank.
F)A signature on an instrument that specifies no indorsee and may consist of merely the signature of the indorser or her authorized agent.
G)Issuer of a promissory note or Cd.
H)A written acknowledgement by a bank of the receipt of money that it promises to repay, with interest at a stated rate; a specialized form of promise to pay money that is given by a bank.
I)A person or organization to whom a draft is directed, and who is ordered to pay the amount of money specified therein; the bank on which a check is drawn.
J)Issuer of a check or draft.
K)A signature on an instrument that attempts to limit the rights of the indorsee in some fashion.
L)Signature that identifies an indorsee to be paid; makes the instrument order paper.
M)Oral, written, or electronic instruction to a receiving bank to pay or to cause another bank to pay a fixed amount of money to a beneficiary.
N)Contractual protections from liability good against holders but not against holders in due course.
O)An instrument involving two parties, one of whom promises to pay to the order of the second a stated sum of money either on demand or at a stated future date.
P)Person who signs an instrument to lend her credit to another party to the instrument.
Q)The transferee of a holder in due course succeeds to the rights of a holder in due course even if the transferee does not qualify for holder in due course status.
R)The first bank into which an item is deposited for collection.
S)Demand for payment or acceptance of an instrument.
T)Acceptance of a check by a bank.
U)Protections from liability good against all holders, including holders in due course.
V)Piece of paper, which may contain an indorsement, that is affixed to an instrument. 
A) An order to pay a fixed sum of money, signed by a drawer, payable on demand or at a definite time. 
B) A specialized form of draft; an order to pay money drawn on a bank and payable on demand. 
C) Legal concept that makes written instruments freely transferable and therefore a readily accepted substitute for money. 
D) Paper that is payable to the possessor of an instrument; a check that is made payable to cash or that is indorsed in blank. 
E) A person who is in possession of an instrument drawn, issued, or indorsed to him or to his order, or to bearer or in blank.
F)A signature on an instrument that specifies no indorsee and may consist of merely the signature of the indorser or her authorized agent.
G)Issuer of a promissory note or Cd.
H)A written acknowledgement by a bank of the receipt of money that it promises to repay, with interest at a stated rate; a specialized form of promise to pay money that is given by a bank.
I)A person or organization to whom a draft is directed, and who is ordered to pay the amount of money specified therein; the bank on which a check is drawn.
J)Issuer of a check or draft.
K)A signature on an instrument that attempts to limit the rights of the indorsee in some fashion.
L)Signature that identifies an indorsee to be paid; makes the instrument order paper.
M)Oral, written, or electronic instruction to a receiving bank to pay or to cause another bank to pay a fixed amount of money to a beneficiary.
N)Contractual protections from liability good against holders but not against holders in due course.
O)An instrument involving two parties, one of whom promises to pay to the order of the second a stated sum of money either on demand or at a stated future date.
P)Person who signs an instrument to lend her credit to another party to the instrument.
Q)The transferee of a holder in due course succeeds to the rights of a holder in due course even if the transferee does not qualify for holder in due course status.
R)The first bank into which an item is deposited for collection.
S)Demand for payment or acceptance of an instrument.
T)Acceptance of a check by a bank.
U)Protections from liability good against all holders, including holders in due course.
V)Piece of paper, which may contain an indorsement, that is affixed to an instrument.

Question 18

Match each statement with the correct term below.
-personal defenses

Accepted Answer

A) An order to pay a fixed sum of money, signed by a drawer, payable on demand or at a definite time. 
B) A specialized form of draft; an order to pay money drawn on a bank and payable on demand. 
C) Legal concept that makes written instruments freely transferable and therefore a readily accepted substitute for money. 
D) Paper that is payable to the possessor of an instrument; a check that is made payable to cash or that is indorsed in blank. 
E) A person who is in possession of an instrument drawn, issued, or indorsed to him or to his order, or to bearer or in blank.
F)A signature on an instrument that specifies no indorsee and may consist of merely the signature of the indorser or her authorized agent.
G)Issuer of a promissory note or Cd.
H)A written acknowledgement by a bank of the receipt of money that it promises to repay, with interest at a stated rate; a specialized form of promise to pay money that is given by a bank.
I)A person or organization to whom a draft is directed, and who is ordered to pay the amount of money specified therein; the bank on which a check is drawn.
J)Issuer of a check or draft.
K)A signature on an instrument that attempts to limit the rights of the indorsee in some fashion.
L)Signature that identifies an indorsee to be paid; makes the instrument order paper.
M)Oral, written, or electronic instruction to a receiving bank to pay or to cause another bank to pay a fixed amount of money to a beneficiary.
N)Contractual protections from liability good against holders but not against holders in due course.
O)An instrument involving two parties, one of whom promises to pay to the order of the second a stated sum of money either on demand or at a stated future date.
P)Person who signs an instrument to lend her credit to another party to the instrument.
Q)The transferee of a holder in due course succeeds to the rights of a holder in due course even if the transferee does not qualify for holder in due course status.
R)The first bank into which an item is deposited for collection.
S)Demand for payment or acceptance of an instrument.
T)Acceptance of a check by a bank.
U)Protections from liability good against all holders, including holders in due course.
V)Piece of paper, which may contain an indorsement, that is affixed to an instrument. 
A) An order to pay a fixed sum of money, signed by a drawer, payable on demand or at a definite time. 
B) A specialized form of draft; an order to pay money drawn on a bank and payable on demand. 
C) Legal concept that makes written instruments freely transferable and therefore a readily accepted substitute for money. 
D) Paper that is payable to the possessor of an instrument; a check that is made payable to cash or that is indorsed in blank. 
E) A person who is in possession of an instrument drawn, issued, or indorsed to him or to his order, or to bearer or in blank.
F)A signature on an instrument that specifies no indorsee and may consist of merely the signature of the indorser or her authorized agent.
G)Issuer of a promissory note or Cd.
H)A written acknowledgement by a bank of the receipt of money that it promises to repay, with interest at a stated rate; a specialized form of promise to pay money that is given by a bank.
I)A person or organization to whom a draft is directed, and who is ordered to pay the amount of money specified therein; the bank on which a check is drawn.
J)Issuer of a check or draft.
K)A signature on an instrument that attempts to limit the rights of the indorsee in some fashion.
L)Signature that identifies an indorsee to be paid; makes the instrument order paper.
M)Oral, written, or electronic instruction to a receiving bank to pay or to cause another bank to pay a fixed amount of money to a beneficiary.
N)Contractual protections from liability good against holders but not against holders in due course.
O)An instrument involving two parties, one of whom promises to pay to the order of the second a stated sum of money either on demand or at a stated future date.
P)Person who signs an instrument to lend her credit to another party to the instrument.
Q)The transferee of a holder in due course succeeds to the rights of a holder in due course even if the transferee does not qualify for holder in due course status.
R)The first bank into which an item is deposited for collection.
S)Demand for payment or acceptance of an instrument.
T)Acceptance of a check by a bank.
U)Protections from liability good against all holders, including holders in due course.
V)Piece of paper, which may contain an indorsement, that is affixed to an instrument.

Question 19

Which of the following is correct with respect to a bank customer's duty to discover and report unauthorized signatures?

Accepted Answer

A) The customer is required to exercise reasonable care and promptness to examine the bank statement. 
B) A customer's duty of examination includes checking the signatures of payees or indorsers. 
C) The bank is liable on all items with unauthorized signatures even if these canceled checks were returned to the customer four years prior to the discovery of the alterations. 
D) The bank is not required to exercise ordinary care in paying the items. 
A) The customer is required to exercise reasonable care and promptness to examine the bank statement. 
B) A customer's duty of examination includes checking the signatures of payees or indorsers. 
C) The bank is liable on all items with unauthorized signatures even if these canceled checks were returned to the customer four years prior to the discovery of the alterations. 
D) The bank is not required to exercise ordinary care in paying the items.

Question 20

Alvero tries to make a $75 withdrawal from an ATM,but the terminal has run out of cash.The bank is liable to Alvero for damages proximately caused by its failure to make the EFT.

Accepted Answer

A) True 
 B)False

Exam 27: Bank Deposits, Collections, and Funds Transfers

Match each statement with the correct term below. -accommodation party

An association of banks and other payors whose members settle accounts with each other on a daily basis is a:

Doug takes a $500 check drawn by Gail to Gail's drawee bank to cash it.Gail has over $10,000 on deposit in her account.If her bank refuses to pay Doug:

UCC Articles 3 and 8 often apply to a bank collection problem.

The relationship between the payor bank and its checking account customer is exclusively governed by statute and leaves no room for contractual modifications.

Which of the following is true of a collecting bank?

If a drawer files a stop payment order on a check,he is automatically relieved of liability for the obligation.

The duty of care exercised by a collecting bank in handling an item transferred to it for collection does not include:

A check drawn on a bank is an order to pay a sum of money and an authorization to charge the amount to the drawer's account.The drawer may countermand this order by which of the following?

The Competitive Equality Banking Act:

Match each statement with the correct term below. -blank indorsement

Match each statement with the correct term below. -drawee

Which of the following is true about UCC Article 4A?

If you lose your wallet along with your ATM card,your liability is

Barry presents to Wake Bank for deposit in his account a check for $100 made out to him by Richard.Wake Bank provisionally credits Barry's account on Monday.When is payment final?

Match each statement with the correct term below. -certificate of deposit

Match each statement with the correct term below. -personal defenses

Which of the following is correct with respect to a bank customer's duty to discover and report unauthorized signatures?

Alvero tries to make a $75 withdrawal from an ATM,but the terminal has run out of cash.The bank is liable to Alvero for damages proximately caused by its failure to make the EFT.

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

Environmental Law

International Business Law

Introduction to Property, property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

Filters