Question 1

On April 6, Ellen sends a check out to a magazine publisher and then discovers she has already paid for the subscription.She calls her bank and orders that the bank not make payment.That order will be good until:

Accepted Answer

A)   October 6 if confirmed in writing.
B)   October 6.
C)   April 13.
D)   April 13 if confirmed in writing. A

Question 2

Dan drew a $100 check on ABC Bank payable "to the order of Peg Buncy." Peg cashed the check at National Bank.National Bank is an agent of Peg until the drawee bank pays the check.

Accepted Answer

A) True 
 B)False  True

Question 3

The Code imposes certain affirmative duties on bank customers and fixes time limits within which they must assert their rights.

Accepted Answer

A) True 
 B)False  True

Question 4

Sylvia draws a check on ABC Bank payable "to the order of Ann Smith." Ann indorses it and deposits it in her account at First Bank.First Bank is a:

Accepted Answer

A)   payee bank.
B)   depositary bank.
C)   payor bank.
D)   drawee bank.

Question 5

A payment order for a wholesale funds transfer must:

Accepted Answer

A)   contain no condition to payment other than the time of payment.
B)   be communicated in writing.
C)   be transmitted by the sender directly to the receiving bank.
D)   All of these.

Question 6

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

Question 7

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?

Accepted Answer

The answer of Mary receives her monthly bank statement on...

Question 8

Theresa has just started working for Citizens Bank as a teller.A man comes into the bank with a $100 check that is 8 months old.She goes to the manager to ask whether she should pay it.If you were the manager, what would you advise her? Explain.

Accepted Answer

The answer of Theresa has just started working for Citizens...

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

Question 10

If First Bank receives a check for collection on Friday at 4:30 p.m., it does not have to present the check to the payor bank by midnight Saturday.

Accepted Answer

A) True 
 B)False

Question 11

A bank is permitted by statute to remove an original paper check from the check collection process and send a substitute check instead.

Accepted Answer

A) True 
 B)False

Question 12

A payor bank is required to dishonor an uncertified check that is more than six months old.

Accepted Answer

A) True 
 B)False

Question 13

Helen deposits a $50 check in her account at First Bank at 4:00 on Friday.The bank is closed on Saturday and Sunday, but opens again on Monday.The midnight deadline for First Bank would be:

Accepted Answer

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

Question 14

Which of the following is true with regard to the federal Electronic Funds Transfer Act?

Accepted Answer

A)   It gives the same protections to customers that are found in Article 4.
B)   It limits a customer's liability for unauthorized transfers to $50 if the consumer notifies the financial institution within two days after learning of the loss or theft.
C)   It is primarily a regulatory statute.
D)   All of these.

Question 15

Point-of-sale systems permit customers to charge items to a charge account at a bank.

Accepted Answer

A) True 
 B)False

Question 16

Banks like electronic funds transfers because they eliminate the float time that a drawer enjoys on a checking account and the paperwork involved in processing checks.

Accepted Answer

A) True 
 B)False

Question 17

Adjudication of drawer's incompetence will not affect the bank's ability to act with respect to the drawer until the bank knows and has a reasonable opportunity to act on this knowledge.

Accepted Answer

A) True 
 B)False

Question 18

Which warranties does a collecting bank give?

Accepted Answer

A)   Warranty of no alteration only.
B)   A collecting bank does not give any warranties.
C)   Entitlement to enforce the item, genuine signatures, no material alteration, no defense good against it, and no knowledge of insolvency of the maker or acceptor or drawer of an unaccepted draft.
D)   Only good title and genuine signatures.

Question 19

If a bank receives a check on Tuesday, it must take proper action, such as forwarding or presenting it, by midnight of Wednesday.

Accepted Answer

A) True 
 B)False

Question 20

ABC Bank sent Joanne, a depositor, her January statement on January 31.Within what length of time after this date will Joanne have to notify ABC bank of any instruments containing alterations or unauthorized signatures included in her January statement?

Accepted Answer

A)   A reasonable period of time, not to exceed 30 days.
B)   60 days.
C)   10 days.
D)   Three years.

Exam 27: Bank Deposits, Collections, and Funds Transferspart Vi: Agency

On April 6, Ellen sends a check out to a magazine publisher and then discovers she has already paid for the subscription.She calls her bank and orders that the bank not make payment.That order will be good until:

Dan drew a $100 check on ABC Bank payable "to the order of Peg Buncy." Peg cashed the check at National Bank.National Bank is an agent of Peg until the drawee bank pays the check.

The Code imposes certain affirmative duties on bank customers and fixes time limits within which they must assert their rights.

Sylvia draws a check on ABC Bank payable "to the order of Ann Smith." Ann indorses it and deposits it in her account at First Bank.First Bank is a:

A payment order for a wholesale funds transfer must:

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?

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?

Theresa has just started working for Citizens Bank as a teller.A man comes into the bank with a $100 check that is 8 months old.She goes to the manager to ask whether she should pay it.If you were the manager, what would you advise her? Explain.

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

If First Bank receives a check for collection on Friday at 4:30 p.m., it does not have to present the check to the payor bank by midnight Saturday.

A bank is permitted by statute to remove an original paper check from the check collection process and send a substitute check instead.

A payor bank is required to dishonor an uncertified check that is more than six months old.

Helen deposits a $50 check in her account at First Bank at 4:00 on Friday.The bank is closed on Saturday and Sunday, but opens again on Monday.The midnight deadline for First Bank would be:

Which of the following is true with regard to the federal Electronic Funds Transfer Act?

Point-of-sale systems permit customers to charge items to a charge account at a bank.

Banks like electronic funds transfers because they eliminate the float time that a drawer enjoys on a checking account and the paperwork involved in processing checks.

Adjudication of drawer's incompetence will not affect the bank's ability to act with respect to the drawer until the bank knows and has a reasonable opportunity to act on this knowledge.

Which warranties does a collecting bank give?

If a bank receives a check on Tuesday, it must take proper action, such as forwarding or presenting it, by midnight of Wednesday.

ABC Bank sent Joanne, a depositor, her January statement on January 31.Within what length of time after this date will Joanne have to notify ABC bank of any instruments containing alterations or unauthorized signatures included in her January statement?