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Exam 24: Banking in the Digital Age

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Question 31

Multiple Choice

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Chad writes Dinah an uncertified check for $500 drawn on Chad's account at Employees Credit Union. Seven months later, Dinah presents the check for payment. The credit union pays the check in good faith without consulting Chad. The credit union

A) cannot charge Chad's account for any amount.
B) can charge Chad's account for $250 only.
C) can charge Chad's account for $500.
D) is liable for breach of contract.

E) None of the above
F) C) and D)

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Question 32

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When a customer makes a deposit into a checking account, he or she becomes a creditor for the amount deposited.

A) True
B) False

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Question 33

Multiple Choice

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Marta has a checking account with Neighbors Bank. Marta signs a check "payable to Olive" drawn on Marta's account. Neighbors Bank is

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

Financial institutions must inform consumers of their rights and responsibilities with respect to electronic fund transfer systems.

If a bank does not dishonor an "on-us" item by the opening of the second banking day following its receipt, the check is considered paid.

Brendan signs a check "pay to the order of 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. This check is

Dhani signs a check "pay to the order of Eton" drawn on Dhani's account in Fidelity Guaranty Bank and dates the check "May 1." Eton presents the check to the bank for payment the following December 15. This is

Elmore pays First National Bank $1,000 plus a service fee to draw a check on itself made payable to Go Delivery Service. This is

A person who writes a check is the drawee .

Each bank in a collection chain must pass a check on before midnight of the next banking day following its receipt.

On an automated teller machine (ATM) belonging to USA Bank, Sven placed a card-skimming device to pull information from the magnetic strips of users' debit cards. The device then transmitted the stolen data to thieves who used it to gain access to, and empty, the bank accounts of the users, including Megan. Megan learned of the theft the next day and promptly notified USA . Is Megan entitled to a recredit of her account for most of the loss due to the theft? Explain.

The Uniform Commercial Code does not govern the relationships of banks with one another as they process checks for payment.

When a bank rightfully dishonors a check, it is liable to the customer for any resulting damages.

Riley pays State Bank $500 plus a service fee to draw a check on itself payable to Torque Plumbing. The party responsible for paying the check is

E-money consists of funds stored on microchips.

Falls River Bank receives a check drawn on the account of Get-Rich Industries, Inc., one of the bank's customers, at 3 p.m . Friday. Hildy, 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

With a joint checking account, the bank normally can hold any joint account owner liable for overdraft payments.

Daisy signs a check "pay to the order of Ewan" drawn on Daisy's account in Finance Bank. Graham forges Ewan's indorsement. Finance Bank pays the check. Most likely

Franco buys a sound system from Grey at Grey's garage sale. Franco writes Grey a check for $250 to pay for the system. Grey is