Question 1

Is Ariel correct that the EFT charges for the magazine subscription should be removed because it was not authorized?

Accepted Answer

A)  No,even if she gave her personal ID number to the unauthorized party,the charge should be removed so long as she notified the bank of the error within 60 days and she did not receive the magazines.
B)  Yes,as long as she did not give her personal ID number to the unauthorized party and she notified the bank of the error within 60 days,then the charge should be removed since she did not receive the magazines.
C)  Yes,because Ariel did not authorize the payment,regardless of whether she received the magazines.
D)  No,even if she received the magazines,the charge should be removed so long as she notified the bank of the error within 60 days.
E)  Yes,but only if Ariel can prove that she did not authorize the payment and that she did not receive the magazines.F) A) and B)
G) A) and C)

Question 2

Sam did not keep track of his ATM card.One day he realized that he had not seen the card in a while,and,after looking for it,realized that it was missing.Unfortunately,over $1,000 had been fraudulently purchased using the card by the time Sam reported it missing.The first fraudulent charge was made 45 days before Sam reported to his bank that the card was missing.Which of the following is Sam liable for?

Accepted Answer

A)  $300
B)  $500
C)  $50
D)  $1,000
E)  $0F) B) and C)
G) A) and D)

Question 3

An oral stop payment order is valid for ________ unless the order is later confirmed in writing.

Accepted Answer

A)  45 Days
B)  30 Days
C)  14 Days
D)  90 Days
E)  10 DaysF) A) and D)
G) None of the above

Question 4

The ________ bank is ultimately responsible for granting funds for a check.

Accepted Answer

A)  Collecting
B)  Transferring
C)  Depositary
D)  Payor
E)  IntermediaryF) A) and E)
G) B) and D)

Question 5

[Employee Theft] Tom operates a hardware store.Tom hired an assistant bookkeeper,Emma,who began to steal from him.Emma came into work early one day and took some checks and the rubber stamp of Tom's signature that he kept in an unlocked drawer,and she used the signature stamp to create a check payable to herself.She then took the check to the bank and cashed it.Tom,who was diligent in examining his bank statements,noticed the unauthorized check to Emma.He also noticed an unauthorized check cashed by Rose,another employee.Rose did not know about the stamp in the unlocked drawer.Instead,she broke into a locked cabinet,stole some checks,and skillfully forged Tom's name.Tom immediately informed his bank about the check involving Emma.He held off,however,on informing the bank about Rose,as she had only stolen fifty dollars and he didn't want to lose both employees at once.Tom told the bank manager what he suspected had happened involving Emma taking his stamp and checks from the unlocked drawer.The bank manager told Tom that the bank was not required to reimburse him because Tom was responsible for his own losses.Tom tells the bank manager about the unauthorized check to Rose 35 days after he received his bank statement and discovered the forgery.To his surprise,when Tom opened his next bank statement,he discovered that after Rose wrote the first check for fifty dollars,she had forged more checks for larger amounts.The bank was notified of those forgeries within 15 days of when Tom received his bank statement.The bank refused to reimburse Tom for the checks written by Rose,again claiming that he was responsible for his own losses.Tom institutes litigation against the bank.
-Which statement is true regarding whether the bank will legally have to accept responsibility for the check presented by Emma?

Accepted Answer

A)  The bank will be required to repay Tom because the check was forged.
B)  Tom will have to bear the loss because the check was paid before the bank had notice of the forgery.
C)  The bank will likely not be required to repay Tom because Tom's negligence in leaving the rubber stamp with his signature readily available likely substantially contributed to the forged signature.
D)  Tom will not have to bear the loss because the forgeries were by an employee;otherwise,he would have had to bear the loss.
E)  The bank has no responsibility to repay Tom on the basis that because Emma was an employee,the check was not considered forged.F) A) and C)
G) B) and E)

Question 6

Which of the following is true regarding types of electronic fund systems?

Accepted Answer

A)  Automated teller machines and pay-by-telephone systems are types of electronic fund systems;but neither point-of-sale systems nor direct deposit systems are types of electronic fund systems.
B)  Automated teller machines,point-of-sale systems,and direct deposits are all types of electronic fund systems;but a pay-by-telephone system is not a type of electronic fund system.
C)  An automated teller machine is a type of electronic fund system;but pay by telephone systems,point-of-sale systems,and direct deposits are not types of electronic fund systems.
D)  Automated teller machines,pay-by-telephone systems,point-of-sale systems,and direct deposits are all types of electronic fund systems.
E)  Automated teller machines and point-of-sale systems are types of electronic fund systems;but neither a direct deposit system nor a pay-by-telephone system is a type of electronic fund system.F) A) and B)
G) C) and D)

Question 7

[Three Checks] On January 1,Jerome writes two checks and dates them January 15,as he is waiting for a large deposit to clear on January 5.The first check is to Rhea,and the second check is to Treya.Treya deposits her check on January 2,but she is notified that the check is dishonored for insufficient funds.On February 1,Jerome writes a check for $50 to Kaleb.Kaleb adds a "0" to the check amount and scratches out the word "Fifty" and writes "Five Hundred" and deposits the check.Jerome dies on April 1.Rhea deposits her check on April 15,but the bank dishonors Rhea's check.
-Who is responsible for the check to Treya?

Accepted Answer

A)  The bank,but only if Jerome had notified the bank that he had postdated the check.
B)  The bank is always responsible for failing to hold funds prior to the date of the check.
C)  Jerome,because someone who writes a check without sufficient funds is always liable,regardless of whether he notified the bank that the check was postdated.
D)  Treya,because the check clearly identified the date of January 15,and she bears the risk of depositing the check early.
E)  Jerome,because he should have told Treya not to deposit the check until after January 15.F) C) and D)
G) C) and E)

Question 8

A check must be presented to a bank within ________ of its date,or the check is considered a stale check.

Accepted Answer

A)  30 Days
B)  9 Months
C)  6 Months
D)  1 Year
E)  90 DaysF) B) and C)
G) A) and E)

Question 9

What is the latest date that Arturo will be available to use the funds from both checks?

Accepted Answer

A)  Thursday,which is three business days after the deposit of the check which is outside the same Federal Reserve Bank area.
B)  Wednesday,which is two business days after the deposit of both checks.
C)  Tuesday,which is twenty-four hours after the deposit of both checks.
D)  Thursday,which is three business days after the deposit of both checks.
E)  The following Monday,which is five business days after the deposit of the check which is outside the same Federal Reserve Bank area.F) A) and B)
G) A) and C)

Question 10

Generally,when an endorsement on a check has been forged,which party is the party ultimately liable for the loss?

Accepted Answer

A)  The bank of the first party to accept the forged instrument.
B)  The first party to accept the forged instrument.
C)  The bank of the drawer even if proper notice was given of the forgery.
D)  The first endorser of the instrument.
E)  The drawer.F) A) and E)
G) D) and E)

Question 11

Which of the following is a bank,other than a payor bank,handling the check at any point from the time the check is deposited to the time it reaches the payor bank?

Accepted Answer

A)  Depositary.
B)  Transferring.
C)  Collecting.
D)  Acknowledging.
E)  Intermediary.F) D) and E)
G) A) and C)

Question 12

A stop payment order should list which five items?

Accepted Answer

A stop-pay...

Question 13

The Federal Reserve System consists of ________ central banks.

Accepted Answer

A)  Twenty
B)  Eight
C)  Six
D)  Thirty
E)  TwelveF) All of the above
G) C) and D)

Question 14

The first ________ of any amount deposited in a bank must be available to the depositor on the business day following the day of deposit.

Accepted Answer

A)  $300
B)  $500
C)  $400
D)  $100
E)  $200F) A) and E)
G) B) and D)

Question 15

Which of the following types of checks may a bank refuse to sell to an individual?

Accepted Answer

A)  A bank cannot refuse to sell cashier's checks,teller's checks,or certified checks to anyone.
B)  Certified checks,but not cashier's or teller's checks.
C)  Certified checks and cashier's checks,but not teller's checks.
D)  Certified checks and teller's checks,but not cashier's checks.
E)  A bank may refuse to sell cashier's checks,teller's checks,and certified checks to anyone.F) All of the above
G) D) and E)

Question 16

What was the court's ruling in Fambrough v.Wal-Mart Stores,Inc. ,the case in the text regarding an effort by users of an ATM machine to recover fees charged when using the machine at Wal-Mart stores?

Accepted Answer

A)  Since Wal-Mart employees could testify that a warning was posted on the ATM machines that a fee will be charged,Wal-Mart was not liable.
B)  Although Wal-Mart employees had no personal knowledge of whether a warning that a fee would be charged was posted on the outside of the ATM machines,Wal-Mart was still protected by the Safe Harbor defense.
C)  Since Wal-Mart employees had no personal knowledge of whether a warning that a fee would be charged was posted on the outside of the ATM machines,Wal-Mart was not protected by the Safe Harbor defense.
D)  Since Wal-Mart posted a warning on the ATM machines that a fee will be charged,Wal-Mart was not liable.
E)  Since Wal-Mart posted a warning on the ATM machines that a fee will be charged,Wal-Mart was protected by the Safe Harbor defense.F) A) and B)
G) None of the above

Question 17

If a customer makes a deposit over ________,the depositary bank may place an 8-day hold on the funds.

Accepted Answer

A)  $5,000
B)  $2,000
C)  $4,000
D)  $3,000
E)  $1,000F) A) and E)
G) B) and D)

Question 18

Today,banks rarely have accounts with the Federal Reserve.

Accepted Answer

A) True 
 B)False

Question 19

time is the period between the time a check is written and the time it is presented for final payment,during which time a customer can still use his or her funds.

Accepted Answer

A)  Float
B)  Usable
C)  Transfer
D)  Electronic
E)  ChargeableF) B) and D)
G) A) and C)

Question 20

[Diamond Earrings] Lena ordered a pair of diamond earrings from Uptown Jewelry Store.She paid in advance because the sales clerk told her that the store would have to pay the supplier before the earrings could be shipped.Later that day,Lena found out from a friend of hers that Uptown Jewelry Store was in financial trouble.Lena was concerned and immediately called her bank and issued a stop-payment order on the check she wrote to Uptown Jewelry Store.She gave the bank all of the correct information orally needed to stop payment on the check.The bank,however,did not stop payment on the check.The check was paid,Uptown Jewelry Store went bankrupt,and Lena was unable to get either her money or the earrings from Uptown Jewelry Store.Lena asked the bank manager for a refund of the check amount.The bank manager told her that the stop-payment order was not good because it was oral and that in any event,under the UCC,banks are not liable for failing to stop payment on a check.The bank manager further told Lena that the bank was a holder in due course,and that Lena is liable for any damages sustained by Uptown Jewelry Store or the bank based upon her attempt to stop payment on the check.
-Which statement is true regarding the manager's statement that stop-payment orders may not be oral?

Accepted Answer

A)  It depends on the amount of the check because oral stop-payment orders may only be given for checks in an amount over $500.
B)  It depends on the amount of the check because oral stop-payment orders may only be given for checks in an amount under $500.
C)  The manager is correct.
D)  It depends on the amount of the check because oral stop-payment orders may only be given for checks in an amount under $1,000.
E)  The manager is incorrect because under the UCC,a stop-payment order may be given orally.F) All of the above
G) A) and B)

Exam 29: Checks and Electronic Fund Transfers

Today,banks rarely have accounts with the Federal Reserve.

Correct Answer
verified

Generally,when an endorsement on a check has been forged,which party is the party ultimately liable for the loss?

Correct Answer
verified

Which of the following is true regarding types of electronic fund systems?

Correct Answer
verified

An oral stop payment order is valid for ________ unless the order is later confirmed in writing.

Correct Answer
verified

A check must be presented to a bank within ________ of its date,or the check is considered a stale check.

Correct Answer
verified

Which of the following is a bank,other than a payor bank,handling the check at any point from the time the check is deposited to the time it reaches the payor bank?

Correct Answer
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The Federal Reserve System consists of ________ central banks.

Correct Answer
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Correct Answer
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A stop payment order should list which five items?

Correct Answer
verified
A stop-pay...
View Answer

What was the court's ruling in Fambrough v.Wal-Mart Stores,Inc. ,the case in the text regarding an effort by users of an ATM machine to recover fees charged when using the machine at Wal-Mart stores?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

time is the period between the time a check is written and the time it is presented for final payment,during which time a customer can still use his or her funds.

Correct Answer
verified

Is Ariel correct that the EFT charges for the magazine subscription should be removed because it was not authorized?

Correct Answer
verified

The first ________ of any amount deposited in a bank must be available to the depositor on the business day following the day of deposit.

Correct Answer
verified

What is the latest date that Arturo will be available to use the funds from both checks?

Correct Answer
verified

Which of the following types of checks may a bank refuse to sell to an individual?

Correct Answer
verified

Correct Answer
verified

If a customer makes a deposit over ________,the depositary bank may place an 8-day hold on the funds.

Correct Answer
verified

The ________ bank is ultimately responsible for granting funds for a check.

Correct Answer
verified

Exam 29: Checks and Electronic Fund Transfers

Today,banks rarely have accounts with the Federal Reserve.

Correct AnswerverifiedShow Answer

Generally,when an endorsement on a check has been forged,which party is the party ultimately liable for the loss?

Correct AnswerverifiedShow Answer

Which of the following is true regarding types of electronic fund systems?

Correct AnswerverifiedShow Answer

An oral stop payment order is valid for ________ unless the order is later confirmed in writing.

Correct AnswerverifiedShow Answer

A check must be presented to a bank within ________ of its date,or the check is considered a stale check.

Correct AnswerverifiedShow Answer

Which of the following is a bank,other than a payor bank,handling the check at any point from the time the check is deposited to the time it reaches the payor bank?

Correct AnswerverifiedShow Answer

The Federal Reserve System consists of ________ central banks.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A stop payment order should list which five items?

Correct AnswerverifiedA stop-pay...View AnswerShow Answer

What was the court's ruling in Fambrough v.Wal-Mart Stores,Inc. ,the case in the text regarding an effort by users of an ATM machine to recover fees charged when using the machine at Wal-Mart stores?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

time is the period between the time a check is written and the time it is presented for final payment,during which time a customer can still use his or her funds.

Correct AnswerverifiedShow Answer

Is Ariel correct that the EFT charges for the magazine subscription should be removed because it was not authorized?

Correct AnswerverifiedShow Answer

The first ________ of any amount deposited in a bank must be available to the depositor on the business day following the day of deposit.

Correct AnswerverifiedShow Answer

What is the latest date that Arturo will be available to use the funds from both checks?

Correct AnswerverifiedShow Answer

Which of the following types of checks may a bank refuse to sell to an individual?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a customer makes a deposit over ________,the depositary bank may place an 8-day hold on the funds.

Correct AnswerverifiedShow Answer

The ________ bank is ultimately responsible for granting funds for a check.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
A stop-pay...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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