Question 1

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

The answer of Due to Susan Sharp's many fraudulent misstatements,Nelly...

Question 2

Intermediary banks that receive payment orders and then send new payment orders to the next bank in the fund transfer sequence are known as ________.

Accepted Answer

Intermediary banks that receive payment orders and then send new payment orders to the next bank in the fund transfer sequence are known as "receiving banks."

Question 3

Mike buys a new $25,000 turbocharged Dodge Vampire for cash.The dealer requires a certified check for that amount,so Mike gets his bank to certify his check for $25,000.One day later,the bank goes bankrupt.Rather than trying to recover in bankruptcy,the dealer pursues Mike.One of the dealer's theories is that Mike is secondarily liable on the check,and that the bank's default makes Mike liable on the instrument.Is the bank right?

Accepted Answer

The answer of Mike buys a new $25,000 turbocharged Dodge...

Question 4

Adams wrote a check to Jimmy for $5,000.After three days,Adam was in an accident and died.Now Jimmy wants to collect money from the bank and so he deposited the check.However,the bank is refusing to pay.Is he entitled to get his money?

Accepted Answer

The answer of Adams wrote a check to Jimmy for...

Question 5

On June 1,Dave Drawer writes a check to Pete Payee.The check is postdated to July 1.Nonetheless,Pete presents the check for payment at Dave's bank on June 15,and receives payment on that date.After Dave learns of this,he screams bloody murder,arguing that the check was not properly payable and that the bank should recredit his account.Is Dave right? Assume that the check is otherwise properly payable,and that Dave never told the bank about it before Pete presented it.

Accepted Answer

The answer of On June 1,Dave Drawer writes a check...

Question 6

No federal law governs payments made in:

Accepted Answer

For the moment,no federal law governs payments made in virtual currencies,and only a few states regulate providers of virtual currency payment options,and then only in limited ways.

Question 7

Which of the following refers to the technology used to verify the legitimacy or originality paper documents by using special ink,which is sensitive to magnetic fields to print the characters?

Accepted Answer

Magnetic ink character recognition is a technology used to verify the legitimacy or originality of paper documents using special ink,which is sensitive to magnetic fields to print the characters.

Question 8

Laura gets a statement and a pile of paid checks from her bank on June 1.Within the pile of checks,is one check with a forged drawer's signature.Laura does not notify the bank about the forged check until the next month,July 1.Does this delay remove the bank's obligation to recredit Laura's account?

Accepted Answer

The answer of Laura gets a statement and a pile...

Question 9

Which of the following is not an example of an electronic funds transfer system?

Accepted Answer

The basic EFT systems are automated teller machines: point-of-sale terminals,which allow consumers to use their EFT cards,including payroll and prepaid gift or general-purpose readable cards (like checks)at retail establishments;preauthorized payments,such as automatic paycheck deposits or mortgage or utility payments;and telephone transfers between accounts or payment of specific bills by phone.

Question 10

The case in the text,Kruser v.Bank of America NT & SA,reinforces the principal that:

Accepted Answer

This case illustrates the application of the EFTA's provisions that require a customer to provide timely notification of any unauthorized use of his card in order to limit his liability for the unauthorized use of the card.

Quiz 34: Checks and Electronic Transfers