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Exam 24: Banking in the Digital Age

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Question 41

Multiple Choice

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On Monday, Ellery deposits in her account at Fiscal Bank a local check for $500.  Within one business day from the date of deposit, Ellery can withdraw

A) $100.
B) $400.
C) $500.
D) $600.

E) A) and C)
F) C) and D)

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Question 42

Multiple Choice

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Smith & Jones Associates is a business customer of Town Bank. Under federal law, Town Bank is not required to provide Smith & Jones with the following

A) any proof of payment except the bank's good faith.
B) monthly statements.
C) recrediting of its account on payment of a forged item.
D) the return of its original checks with its monthly statements.

E) A) and D)
F) All of the above

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Question 43

True/False

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A check cannot be retained at its place of deposit, with only its image or description presented for payment.

If a check is not honored, the bank is liable to the payee or to the holder in a civil suit.

Cleo writes a check for $100 drawn on Debit & Credit Bank and presents it to Elegant Jewelers for payment. If the check is not backed by sufficient funds and intent to defraud can be proved, Cleo may be prosecuted for

The Electronic Fund Transfer Act (EFTA) provides a basic framework for the rights, liabilities, and responsibilities of users of EFT systems.

The bank is not responsible for determining whether the signature on a customer's check is genuine.

Shane issues a check drawn on Thrifty Bank to Farm Supply Store to pay for a rototiller. Later, Shane discovers a defect in the device and orders Thrifty to stop payment on the check. Shane does not renew the order, and the bank clears the check eight months later. The bank

Nick steals two checks from Pauline-a blank check and a check payable to the order of Retail Outlets Company, drawn on Pauline's account with State Bank. Nick forges Pauline's signature on the blank check and makes it payable to himself. Nick forges Retail Outlets' indorsement on the back of the check payable to Retail Outlets, and adds "Pay to the order of Nick." At United Credit Union, Nick indorses the back of both checks with his own name and gives them to United for cash. United does not know about the theft or the forged signatures and presents the checks to State Bank, which pays them. Pauline, who was not negligent, discovers the forgeries and asks State Bank to recredit her account. Who suffers the loss on each check?

Dana writes a check to Becky on Dana's account at Community Bank. The bank dishonors the check even though Dana has sufficient funds in her account. The bank is liable to

Maya uses e-money consisting of funds stored on microchips in her laptop, phone, and tablet to pay bills. This effectively replaces physical cash with virtual cash in the form of

The death of a customer immediately revokes a bank's authority to pay an item.