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Exam 18: Banking in the Digital Age

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Question 1

Multiple Choice

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Gillis writes a check to Harley as payment for a game player but soon discovers it is broken. He goes to the drawee bank and orally authorizes Ilene, a bank officer, to stop payment on the check. This order is valid for​

A) fourteen days.
B) ​any stated period of time.
C) ​six days.
D) ​six months.

E) None of the above
F) A) and B)

Correct Answer

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A

Question 2

Multiple Choice

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Dalton presents an uncertified check for payment more than six months after its date. The check was drawn by Emma on her account in First Bank. If the bank follows the usual banking practice in such a case, it will​

A) ​cash the check.
B) ​consult Emma.
C) ​refuse to cash the check.
D) ​ask Dalton what he would prefer.

E) A) and B)
F) B) and D)

Correct Answer

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Question 3

True/False

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Smart cards carry and process security programming.

When a bank pays a check on which the drawer's signature is forged, generally the customer suffers the loss.

On Friday morning, Geoff deposits into his account at Heartland Bank a $500 check from Imelda, who also has an account at Heartland. On that same day, this check is considered​

Only a customer or a person authorized to draw on an account can order a bank not to pay a check when it is presented for payment.

Brendan signs a check "pay to the order of City College Bookstore" drawn on his account in Delta Bank to pay for his current semester's textbooks. The bookstore deposits the check in its account in Eagle Bank. Like most checks, this check is​

Finance Bank receives a check drawn on the account of Enterprise Industries, Inc., one of the bank's customers, at 3 p.m. Friday. Dora, the presenter of the check, is not one of the bank's customers. The bank uses deferred posting with a 2 p.m. cutoff hour. If it decides to dishonor the check, it must do so by midnight​

Ervin signs a check "pay to the order of Felicia" drawn on Ervin's account in Garden Fields Bank. Ervin later orders the bank not to pay the check, but the bank pays it over Ervin's order. Subsequent checks written on Ervin's account "bounce." Most likely liable for the costs to Ervin is​

Dana writes a check to Becky on Dana's account at Community Bank. The bank dishonors the check even though Dana has sufficient funds in her account. The bank is liable to​

Bea writes a check for $100 drawn on Savers Credit Union and presents it to Timpani Jewelers for payment. If the check is not backed by sufficient funds, Bea may be prosecuted for​

Ridgeline Bank creates a paper reproduction of customer Sophie's check with the statement "This is a legal copy of your check. You can use it in the same way you would use the original check." This is​

A certified check is a check that has been accepted by the bank on which it is drawn.

The death of a customer immediately revokes a bank's authority to pay an item.

A bank is not obligated to pay an uncertified check presented less than six months from its date.

A bank that pays a customer's check bearing a forged indorsement is obligated to recredit the customer's account.

A customer has two days to discover and notify the bank of any error on the monthly statement involving an electronic transfer of funds.

When receiving a stale check for payment, a bank has no option but to refuse to pay the check.

A bank that encodes information on an item after its issue warrants to any subsequent bank that the information is correct.

A drawer is liable to the holder of a check in a civil suit if the check is dishonored for insufficient funds.