Del signs a check "pay to the order of Eppie" drawn on Del's account in First Federal Bank.Greta forges Eppie's indorsement.First Federal pays the check.Most likely
A) Del will be liable for the amount.
B) Eppie will have to pay Del for the amount.
C) First Federal will have to recredit Del's account.
D) the Federal Reserve will reimburse all parties for their costs.

Question

Del signs a check "pay to the order of Eppie" drawn on Del's account in First Federal Bank.Greta forges Eppie's indorsement.First Federal pays the check.Most likely​ 
A) ​Del will be liable for the amount. 
B) ​Eppie will have to pay Del for the amount. 
C) ​First Federal will have to recredit Del's account. 
D) ​the Federal Reserve will reimburse all parties for their costs.

Quizplus · Accepted Answer

First Federal Bank is liable for paying on a forged endorsement and must recredit Del's account, as the bank is responsible for verifying endorsements before making payments.

Del Signs a Check "Pay to the Order of Eppie