Conversion of an instrument will occur if:
A) a bank takes a check from another bank.
B) a bank refuses to return a canceled check.
C) a bank cashes a check with a forged indorsement.
D) an indorser gives a check to the bank.

Question

Quizplus · Accepted Answer

Conversion of an instrument, such as a check, occurs when the instrument is wrongfully taken, held, or disposed of, causing loss to another party. Cashing a check with a forged endorsement is a direct example of conversion because it involves unauthorized action with the instrument that results in harm to the rightful owner or another interested party.

Conversion of an Instrument Will Occur If