Question 1

Under the Expedited Funds Availability Act,customers can draw upon checks deposited in their checking account within:

Accepted Answer

A)  the second business day following deposit,if the drawee bank is in the same Federal Reserve check-processing region as the depositary bank.
B)  one week following deposit,if the drawee bank is in a different Federal Reserve check-processing region than the depositary bank.
C)  three days after the deposit,in the case of checks drawn on the U.S.Treasury.
D)  five days of deposit in the case of cashier's checks.

Question 2

Prof.Bob DeSlob writes a check on his Big Bank checking account for $1 payable to "Department of Business Law Coffee Club" to pay for his weekly membership and gives it to his colleague Carol.Bob does not place a decimal point after the "1" nor does he complete the line ending in "dollars." Carol,knowing that Bob can well afford it,prints in block letters the words "One Hundred" on the line ending in "dollars." Carol then gives the check to Dot,the department secretary,who is in charge of the Coffee Club.Dot presents the check to Big Bank for payment,and Big Bank charges $100 from Bob's account.Which of the following statements is most accurate?

Accepted Answer

A)  Bob's account must be recredited $99.
B)  Bob's account must be recredited $100.
C)  Bob contributed to the alteration and may be barred from claiming forgery.
D)  Bob had a duty to place a stop-payment order on the check.

Question 3

A bank may,but need not,pay any checks that are more than six months old.

Accepted Answer

A) True 
 B)False

Question 4

Due to Susan Sharp's many fraudulent misstatements,Nelly Nice buys Susan's car.Nelly writes Susan a check for $5,000 in payment.Susan immediately negotiates the check to Patty Proper,who qualifies as a holder in due course.In the meantime,Nelly discovers that the car is junk and makes a timely and proper stop-payment order to her bank.However,when Patty presents the check for payment,the bank pays it anyway.Is the bank required to recredit Nelly's account?

Accepted Answer

No,the bank is not required to recredit ...

Question 5

Which of the following is an EXCEPTION to the mandatory availability schedules of the Expedited Funds Availability Act?

Accepted Answer

A)  Cashier's checks
B)  Teller's checks
C)  Electronic payments
D)  New accounts D

Question 6

In case a check is altered so skillfully that a bank is unable to detect the alteration,which of the following stands true?

Accepted Answer

A)  The bank should honor only those checks for which it receives a notice from the drawer.
B)  The bank is allowed to charge to the account the amount for which the check originally was written.
C)  The bank will be liable to recredit the drawer's account for negligence.
D)  The bank will hold the drawer responsible for contributing to the alteration of the check.

Question 7

Under the Electronic Funds Transfer Act how many days do operators of EFT systems have to investigate errors or provisionally recredit a consumer's account?

Accepted Answer

A)  10 working days
B)  60 days
C)  14 working days
D)  90 days

Question 8

In the case in the text,Anderson v.Branch Banking and Trust Company,why did the court find in favor of the bank?

Accepted Answer

A)  The plaintiffs failed to timely respond to the bank's motion to dismiss.
B)  The plaintiffs waived any liability the bank would have had.
C)  The plaintiffs failed to comply with the notice requirement under the contract.
D)  The plaintiffs could not show that the bank failed to use ordinary care.

Question 9

When there are insufficient funds in a drawer's account,and a check is presented to be honored,the bank can:

Accepted Answer

A)  honor the check,and charge the customer on the next deposit.
B)  return the check,and charge a penalty.
C)  hold the check and payment,even if the holder suffers a loss against the drawer.
D)  charge a fee to the holder in due course and to the drawer.

Question 10

________ truncation refers to when the drawee bank keeps the original checks,in contrast to ________ truncation,where the payee keeps the original check.

Accepted Answer

A)  Process;radical
B)  Check;process
C)  Check;radical
D)  Radical;check

Question 11

Banks typically put a ________ on the depositor's ability to access some or all of the funds represented by the instrument until it ________ through the system.

Accepted Answer

A)  halt;clears
B)  hold;passes
C)  hold;clears
D)  halt;passes

Question 12

Banks are not required to disclose their funds availability policy to all of their customers.

Accepted Answer

A) True 
 B)False

Question 13

The relationship between a depositor and a bank is governed by the deposit agreement and Articles 3 and 4 of the UCC.

Accepted Answer

A) True 
 B)False  True

Question 14

Which of the following is true of the Check 21 Act?

Accepted Answer

A)  It allows banks to handle a limited number of checks electronically.
B)  It has made it mandatory for banks to return the canceled checks to the customers.
C)  It authorizes banks to transform information they receive in electronic form back into a paper copy of the check.
D)  It requires that banks keep the customers' original checks for a specified period of time.

Question 15

Which of the following is true in case of death or incompetence of a customer?

Accepted Answer

A)  A bank cannot pay checks of a deceased customer until it has notice of the customer's death.
B)  If a bank knows of a customer's death,it can pay checks written by the customer prior to his/her death,for a period of 30 days.
C)  The deceased person's heirs or other persons claiming an interest in the account can order the bank to stop payment.
D)  A bank can declare checks signed by the customer while he/she was alive,as null and void. C

Question 16

Which of the following is most true about stop-payment orders?

Accepted Answer

A)  Their validity is only for 14 days.
B)  Their validity is only for six months.
C)  They must give the bank 14 days to act on the order.
D)  They can be oral or written.

Question 17

Wire transfer is used for transfer of funds across the country or around the world.This service is generally used by large business and financial institutions.

Accepted Answer

A) True 
 B)False

Question 18

A bank is within its rights to ask a customer to sign a form to:

Accepted Answer

A)  disclaim its responsibility to act in good faith.
B)  limit its liability for a stop-payment order or damages if it fails to obey the order.
C)  disclaim its duty to exercise ordinary care in paying a check over a stop-payment order.
D)  limit its liability for negligence.

Question 19

In the case in the text Cincinnati Insurance Company v.Wachovia Bank National Association,what was the court's holding?

Accepted Answer

A)  The bank was not liable because it limited its liability in the contract.
B)  The bank was not liable because it acted in good faith.
C)  The bank was liable because it did not provide any precautions to prevent fraud.
D)  The bank was liable because it could not waive its liability in the contract.

Question 20

A ________ is a request made by a customer of a drawee bank instructing it not to pay or certify a specific check.

Accepted Answer

A)  cut-off request
B)  canceled check
C)  stop-payment order
D)  void check

Exam 34: Checks and Electronic Transfers

Under the Expedited Funds Availability Act,customers can draw upon checks deposited in their checking account within:

Correct Answer
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Correct Answer
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A bank may,but need not,pay any checks that are more than six months old.

Correct Answer
verified

Correct Answer
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No,the bank is not required to recredit ...
View Answer

Which of the following is an EXCEPTION to the mandatory availability schedules of the Expedited Funds Availability Act?

Correct Answer
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D

In case a check is altered so skillfully that a bank is unable to detect the alteration,which of the following stands true?

Correct Answer
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Under the Electronic Funds Transfer Act how many days do operators of EFT systems have to investigate errors or provisionally recredit a consumer's account?

Correct Answer
verified

In the case in the text,Anderson v.Branch Banking and Trust Company,why did the court find in favor of the bank?

Correct Answer
verified

When there are insufficient funds in a drawer's account,and a check is presented to be honored,the bank can:

Correct Answer
verified

truncation refers to when the drawee bank keeps the original checks,in contrast to truncation,where the payee keeps the original check.

Correct Answer
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Banks typically put a on the depositor's ability to access some or all of the funds represented by the instrument until it through the system.

Correct Answer
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Banks are not required to disclose their funds availability policy to all of their customers.

Correct Answer
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The relationship between a depositor and a bank is governed by the deposit agreement and Articles 3 and 4 of the UCC.

Correct Answer
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True

Which of the following is true of the Check 21 Act?

Correct Answer
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Which of the following is true in case of death or incompetence of a customer?

Correct Answer
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C

Which of the following is most true about stop-payment orders?

Correct Answer
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Wire transfer is used for transfer of funds across the country or around the world.This service is generally used by large business and financial institutions.

Correct Answer
verified

A bank is within its rights to ask a customer to sign a form to:

Correct Answer
verified

In the case in the text Cincinnati Insurance Company v.Wachovia Bank National Association,what was the court's holding?

Correct Answer
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A ________ is a request made by a customer of a drawee bank instructing it not to pay or certify a specific check.

Correct Answer
verified

Exam 34: Checks and Electronic Transfers

Under the Expedited Funds Availability Act,customers can draw upon checks deposited in their checking account within:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A bank may,but need not,pay any checks that are more than six months old.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNo,the bank is not required to recredit ...View AnswerShow Answer

Which of the following is an EXCEPTION to the mandatory availability schedules of the Expedited Funds Availability Act?

Correct AnswerverifiedD

In case a check is altered so skillfully that a bank is unable to detect the alteration,which of the following stands true?

Correct AnswerverifiedShow Answer

Under the Electronic Funds Transfer Act how many days do operators of EFT systems have to investigate errors or provisionally recredit a consumer's account?

Correct AnswerverifiedShow Answer

In the case in the text,Anderson v.Branch Banking and Trust Company,why did the court find in favor of the bank?

Correct AnswerverifiedShow Answer

When there are insufficient funds in a drawer's account,and a check is presented to be honored,the bank can:

Correct AnswerverifiedShow Answer

________ truncation refers to when the drawee bank keeps the original checks,in contrast to ________ truncation,where the payee keeps the original check.

Correct AnswerverifiedShow Answer

Banks typically put a ________ on the depositor's ability to access some or all of the funds represented by the instrument until it ________ through the system.

Correct AnswerverifiedShow Answer

Banks are not required to disclose their funds availability policy to all of their customers.

Correct AnswerverifiedShow Answer

The relationship between a depositor and a bank is governed by the deposit agreement and Articles 3 and 4 of the UCC.

Correct AnswerverifiedTrue

Which of the following is true of the Check 21 Act?

Correct AnswerverifiedShow Answer

Which of the following is true in case of death or incompetence of a customer?

Correct AnswerverifiedC

Which of the following is most true about stop-payment orders?

Correct AnswerverifiedShow Answer

Wire transfer is used for transfer of funds across the country or around the world.This service is generally used by large business and financial institutions.

Correct AnswerverifiedShow Answer

A bank is within its rights to ask a customer to sign a form to:

Correct AnswerverifiedShow Answer

In the case in the text Cincinnati Insurance Company v.Wachovia Bank National Association,what was the court's holding?

Correct AnswerverifiedShow Answer

A ________ is a request made by a customer of a drawee bank instructing it not to pay or certify a specific 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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No,the bank is not required to recredit ...
View Answer

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D

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Correct Answer
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Correct Answer
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Correct Answer
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truncation refers to when the drawee bank keeps the original checks,in contrast to truncation,where the payee keeps the original check.

Correct Answer
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Banks typically put a on the depositor's ability to access some or all of the funds represented by the instrument until it through the system.

Correct Answer
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Correct Answer
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Correct Answer
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True

Correct Answer
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C

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Correct Answer
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