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Exam 41: Checks and Electronic Fund Transfers

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Question 21

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Which of the following statements is true of wire transfers?

A) Article 4A,which covers wire transfers,includes consumer payments that are covered by EFTA.
B) International wire transfer systems are known as " Fedwire."
C) The Federal Reserve operates a domestic wire transfer system that can be made through CHIPS.
D) Electronic funds transfers between business and financial institutions are generally referred to as wholesale wire transfers.

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Question 22

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A bank may pay a postdated check unless it has received notice from the customer not to pay until the instrument's date.

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Question 23

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If a person stops payment on a check and the bank honors the stop-payment order,the person is not liable to the holder of the check.

A bank does not owe a duty to its customer to pay any checks out of the account that are more than six months old.

As under the Fair Credit Billing Act,operators under the Electronic Funds Transfer Act are given a maximum of 90 working days to investigate errors or provisionally recredit the customer's account.

If the drawer of a check orders the drawee bank not to pay the check,the drawee bank generally owes the drawer a duty not to certify the check.

A cashier's check is similar to a certified check.

If a drawee bank certifies a check,which of the following is/are discharged of their liability on the check?

Describe the provisions of the Electronic Funds Transfer Act.

Bill purchased a new car from Friendly Fred's Autos.Fred indorsed the check to Shirley for value.Shirley presented the check to the bank,and the bank cashed the check.Later,Bill attempted to place a stop-payment order on the check because the car he purchased from Fred was defective.Under these circumstances:

A drawee bank is obligated to certify a check.

Explain the difference between a certified check,a cashier's check,and a teller's check.

Which article of the Uniform Commercial Code covers electronic funds transfers between businesses and financial institutions?

The Check Clearing for the 21st Century Act is commonly known as Check 21,and is a federal law that is designed to enable banks to handle more checks manually.

Revised Article 3 recognizes the modern bank practice of retaining checks,and permits the bank to supply only a statement showing the item number,amount,and date of payment.

The drawee bank does not have the right to charge a payable check to the drawer's account if this will create an overdraft in the account.

Which of the following is an electronic funds transfer system?

When a person deposits money in an account at the bank,the bank no longer considers that person the owner of the money; instead,he is a creditor of the bank.

Describe the limitations on the bank's right or duty to charge the depositor's account for the check.

Bob makes a check for $100 in a way that makes it possible for someone to easily alter it to read $1,100,and it is so altered.Under these circumstances: