Faye forges Greta's signature on a check "payable to the order of Faye" drawn on Greta's account at Home Bank. Most likely, if the bank pays the check
A)the Federal Reserve will reimburse all parties for their costs.
B)the loss will be apportioned among all of the bank's customers.
C)Greta will be liable for the amount.
D)the bank will have to recredit Greta's account.

Question

Quizplus · Accepted Answer

The bank will have to recredit Greta's account because it is the bank's responsibility to verify the authenticity of the signatures on checks drawn on its accounts. If the bank fails to do so and pays out on a forged signature, it is generally liable for the loss and must restore the funds to the account holder's account.

Faye Forges Greta's Signature on a Check "Payable to the Order