Question 1

time is the period between the time a check is written and the time it is presented for final payment,during which time a customer can still use his or her funds.

Accepted Answer

A)Float time is the period between the time a check is written and the time it is
presented for final payment,during which a customer can still use his or her funds.
B)Float time is the period between the time a check is written and the time it is presented for final payment,during which a customer can still use his or her funds.
C)Float time is the period between the time a check is written and the time it is presented for final payment,during which a customer can still use his or her funds.
D)Float time is the period between the time a check is written and the time it is presented for final payment,during which a customer can still use his or her funds.
E)Float time is the period between the time a check is written and the time it is presented for final payment,during which a customer can still use his or her funds.
Page Ref: 652
Topic: E-Money and Online Banking

Question 2

If a customer does not notify the bank of an unauthorized signature within ________ days after the statement has been made available,she cannot hold the bank liable for the payment under the UCC.

Accepted Answer

A)If the customer discovers a forgery or unauthorized payment,she must notify the bank promptly [UCC 4-406c)].Under the UCC,if the customer does not notify the bank of an unauthorized signature within 30 days after the statement has been made available,she cannot hold the bank liable for the payment [UCC 4-406d)].
B)If the customer discovers a forgery or unauthorized payment,she must notify the bank promptly [UCC 4-406c)].Under the UCC,if the customer does not notify the bank of an unauthorized signature within 30 days after the statement has been made available,she cannot hold the bank liable for the payment [UCC 4-406d)].
C)If the customer discovers a forgery or unauthorized payment,she must notify the bank promptly [UCC 4-406c)].Under the UCC,if the customer does not notify the bank of an unauthorized signature within 30 days after the statement has been made available,she cannot hold the bank liable for the payment [UCC 4-406d)].
D)If the customer discovers a forgery or unauthorized payment,she must notify the bank promptly [UCC 4-406c)].Under the UCC,if the customer does not notify the bank of an unauthorized signature within 30 days after the statement has been made available,she cannot hold the bank liable for the payment [UCC 4-406d)].
E)If the customer discovers a forgery or unauthorized payment,she must notify the bank promptly [UCC 4-406c)].Under the UCC,if the customer does not notify the bank of an unauthorized signature within 30 days after the statement has been made available,she cannot hold the bank liable for the payment [UCC 4-406d)].
Page Ref: 646
Topic: When a Bank May Charge a Customer's Account

Question 3

Which of the following was the result on appeal in Merisier v.Bank of America,the case in the text in which the plaintiff sued challenging the bank's determination that based on her involvement,she was not entitled to funds obtained through alleged fraudulent use of her debit card?

Accepted Answer

A)In Merisier,the Court of Appeals determined that the plaintiff had advanced no reason to disturb the District Court's findings.According to the appellate court,"that the transactions were authorized is a factual determination that we will reverse only for clear error." A finding is clearly erroneous when although there is evidence to support it,the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.
Page Ref: 647
B)?In Merisier,the Court of Appeals determined that the plaintiff had advanced no reason to disturb the District Court's findings.According to the appellate court,"that the transactions were authorized is a factual determination that we will reverse only for clear error." A finding is clearly erroneous when although there is evidence to support it,the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.
C)In Merisier,the Court of Appeals determined that the plaintiff had advanced no reason to disturb the District Court's findings.According to the appellate court,"that the transactions were authorized is a factual determination that we will reverse only for clear error." A finding is clearly erroneous when although there is evidence to support it,the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.
D)In Merisier,the Court of Appeals determined that the plaintiff had advanced no reason to disturb the District Court's findings.According to the appellate court,"that the transactions were authorized is a factual determination that we will reverse only for clear error." A finding is clearly erroneous when although there is evidence to support it,the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.
E)In Merisier,the Court of Appeals determined that the plaintiff had advanced no reason to disturb the District Court's findings.According to the appellate court,"that the transactions were authorized is a factual determination that we will reverse only for clear error." A finding is clearly erroneous when although there is evidence to support it,the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.
Topic: When a Bank May Charge a Customer's Account

Question 4

Which of the following is true regarding types of electronic fund systems?

Accepted Answer

A)The most common types of electronic fund systems are automated teller machines,point-of-sale systems,direct deposits and withdrawals,
pay-by-telephone systems,and online systems.
Page Ref: 649
B)?The most common types of electronic fund systems are automated teller machines,point-of-sale systems,direct deposits and withdrawals,
pay-by-telephone systems,and online systems.
C)The most common types of electronic fund systems are automated teller machines,point-of-sale systems,direct deposits and withdrawals,
pay-by-telephone systems,and online systems.
D)The most common types of electronic fund systems are automated teller machines,point-of-sale systems,direct deposits and withdrawals,
pay-by-telephone systems,and online systems.
E)The most common types of electronic fund systems are automated teller machines,point-of-sale systems,direct deposits and withdrawals,
pay-by-telephone systems,and online systems.
Topic: Electronic Fund Transfers

Question 5

Regardless of the care used in cashing a check by the bank,a customer must report a forgery within ________ from the date the bank statement showing the forgery is available to the customer or the customer will lose the right to recover.

Accepted Answer

A)Regardless of the 30-day requirement for multiple forgeries or the care used in
cashing a check,a customer must report a forgery within one year from the date the statement is available to the customer or he will lose the right to recover that money [UCC 4-406f)].
B)Regardless of the 30-day requirement for multiple forgeries or the care used in cashing a check,a customer must report a forgery within one year from the date the statement is available to the customer or he will lose the right to recover that money [UCC 4-406f)].
C)Regardless of the 30-day requirement for multiple forgeries or the care used in cashing a check,a customer must report a forgery within one year from the date the statement is available to the customer or he will lose the right to recover that money [UCC 4-406f)].
D)Regardless of the 30-day requirement for multiple forgeries or the care used in cashing a check,a customer must report a forgery within one year from the date the statement is available to the customer or he will lose the right to recover that money [UCC 4-406f)].
E)Regardless of the 30-day requirement for multiple forgeries or the care used in cashing a check,a customer must report a forgery within one year from the date the statement is available to the customer or he will lose the right to recover that money [UCC 4-406f)].
Page Ref: 648
Topic: When a Bank May Charge a Customer's Account

Question 6

[Bad Check] Alana,a bank teller,saw that customer Liam did not have sufficient funds in his account to cover a check presented for payment.Alana was new and was confused about what to do with the check.She asked the bank manager,Pedro,about any available options.Pedro told her that the bank was required by law to dishonor the check,the check should be returned to the holder with a notation that it had been dishonored,and that it could not be presented again.Alana asked Pedro if there were any policies the bank could institute to provide customers with overdraft protection,and Pedro answered that those were prohibited by law.
-Which statement is true regarding Pedro's statement that the bank's only choice was to dishonor the check?

Accepted Answer

A)Suppose you write 10 checks on your company's account to pay your employees' salaries.Unfortunately,you do not have sufficient funds to cover the full amount of the last check;you are short $50.The bank has two options: 1)dishonor the last check,or 2)create an overdraft by paying the check and charging the account the amount short [UCC 4-401a)].
B)Suppose you write 10 checks on your company's account to pay your employees' salaries.Unfortunately,you do not have sufficient funds to cover the full amount of the last check;you are short $50.The bank has two options: 1)dishonor the last check,or 2)create an overdraft by paying the check and charging the account the amount short [UCC 4-401a)].
C)Suppose you write 10 checks on your company's account to pay your employees' salaries.Unfortunately,you do not have sufficient funds to cover the full amount of the last check;you are short $50.The bank has two options: 1)dishonor the last check,or 2)create an overdraft by paying the check and charging the account the amount short [UCC 4-401a)].
D)Suppose you write 10 checks on your company's account to pay your employees' salaries.Unfortunately,you do not have sufficient funds to cover the full amount of the last check;you are short $50.The bank has two options: 1)dishonor the last check,or 2)create an overdraft by paying the check and charging the account the amount short [UCC 4-401a)].
Page Ref: 642
E)?Suppose you write 10 checks on your company's account to pay your employees' salaries.Unfortunately,you do not have sufficient funds to cover the full amount of the last check;you are short $50.The bank has two options: 1)dishonor the last check,or 2)create an overdraft by paying the check and charging the account the amount short [UCC 4-401a)].
Topic: When a Bank May Charge a Customer's Account

Question 7

Sam did not keep track of his ATM card.One day he realized that he had not seen the card in a while,and,after looking for it,realized that it was missing.Unfortunately,over $1,000 had been fraudulently purchased using the card by the time Sam reported it missing.The first fraudulent charge was made 45 days before Sam reported to his bank that the card was missing.Which of the following is Sam liable for?

Accepted Answer

A)If a customer's ATM card is lost or stolen,the customer must notify the bank within two days.The customer is then liable for only the first $50 stolen.If the customer does not notify the bank,the customer will then be held liable for up to
$500 that is stolen.
B)If a customer's ATM card is lost or stolen,the customer must notify the bank within two days.The customer is then liable for only the first $50 stolen.If the customer does not notify the bank,the customer will then be held liable for up to
$500 that is stolen.
C)If a customer's ATM card is lost or stolen,the customer must notify the bank within two days.The customer is then liable for only the first $50 stolen.If the customer does not notify the bank,the customer will then be held liable for up to
$500 that is stolen.
Page Ref: 650
D)?If a customer's ATM card is lost or stolen,the customer must notify the bank within two days.The customer is then liable for only the first $50 stolen.If the customer does not notify the bank,the customer will then be held liable for up to
$500 that is stolen.
E)If a customer's ATM card is lost or stolen,the customer must notify the bank within two days.The customer is then liable for only the first $50 stolen.If the customer does not notify the bank,the customer will then be held liable for up to
$500 that is stolen.
Topic: Electronic Fund Transfers

Question 8

Generally,when an endorsement on a check has been forged,which party is the party ultimately liable for the loss?

Accepted Answer

A)Generally,when an endorsement has been forged,the first party to accept the
forged instrument is ultimately liable for the loss because a forged endorsement does not legally transfer title [UCC 4-207a)2)].
B)Generally,when an endorsement has been forged,the first party to accept the forged instrument is ultimately liable for the loss because a forged endorsement does not legally transfer title [UCC 4-207a)2)].
C)Generally,when an endorsement has been forged,the first party to accept the forged instrument is ultimately liable for the loss because a forged endorsement does not legally transfer title [UCC 4-207a)2)].
D)Generally,when an endorsement has been forged,the first party to accept the forged instrument is ultimately liable for the loss because a forged endorsement does not legally transfer title [UCC 4-207a)2)].
E)Generally,when an endorsement has been forged,the first party to accept the forged instrument is ultimately liable for the loss because a forged endorsement does not legally transfer title [UCC 4-207a)2)].
Page Ref: 648
Topic: When a Bank May Charge a Customer's Account

Question 9

________ allows a consumer to directly transfer funds from a banking account to a merchant.

Accepted Answer

A)A point-of-sale system allows a consumer to directly transfer funds from a
banking account to a merchant.
B)A point-of-sale system allows a consumer to directly transfer funds from a banking account to a merchant.
C)A point-of-sale system allows a consumer to directly transfer funds from a banking account to a merchant.
D)A point-of-sale system allows a consumer to directly transfer funds from a banking account to a merchant.
E)A point-of-sale system allows a consumer to directly transfer funds from a banking account to a merchant.
Page Ref: 649
Topic: Electronic Fund Transfers

Question 10

Which of the following governs consumer fund transactions in electronic fund transfers?

Accepted Answer

A)Consumer fund transactions are governed by the Electronic Fund Transfer Act of
1978 EFTA).This act sets out the rights and liabilities of the parties involved in electronic fund transfers.
B)Consumer fund transactions are governed by the Electronic Fund Transfer Act of 1978 EFTA).This act sets out the rights and liabilities of the parties involved in electronic fund transfers.
C)Consumer fund transactions are governed by the Electronic Fund Transfer Act of 1978 EFTA).This act sets out the rights and liabilities of the parties involved in electronic fund transfers.
D)Consumer fund transactions are governed by the Electronic Fund Transfer Act of 1978 EFTA).This act sets out the rights and liabilities of the parties involved in electronic fund transfers.
E)Consumer fund transactions are governed by the Electronic Fund Transfer Act of 1978 EFTA).This act sets out the rights and liabilities of the parties involved in electronic fund transfers.
Page Ref: 650
Topic: Electronic Fund Transfers

Question 11

Assuming the bank is not negligent,in the case of multiple forgeries by the same wrongdoer,what is the effect of a customer's failure to notify the bank of the first forgery in regard to subsequent forgeries?

Accepted Answer

A)The duty to examine the bank statement is particularly important in cases where there have been multiple forgeries by the same forger,or "same wrongdoer." If a customer examines a statement and does not notify the bank of the first forgery within 30 days,the customer will be liable for future forgeries on the customer's account by the same wrongdoer.
B)The duty to examine the bank statement is particularly important in cases where there have been multiple forgeries by the same forger,or "same wrongdoer." If a customer examines a statement and does not notify the bank of the first forgery within 30 days,the customer will be liable for future forgeries on the customer's account by the same wrongdoer.
C)The duty to examine the bank statement is particularly important in cases where there have been multiple forgeries by the same forger,or "same wrongdoer." If a customer examines a statement and does not notify the bank of the first forgery within 30 days,the customer will be liable for future forgeries on the customer's account by the same wrongdoer.
D)The duty to examine the bank statement is particularly important in cases where there have been multiple forgeries by the same forger,or "same wrongdoer." If a customer examines a statement and does not notify the bank of the first forgery within 30 days,the customer will be liable for future forgeries on the customer's account by the same wrongdoer.
E)The duty to examine the bank statement is particularly important in cases where there have been multiple forgeries by the same forger,or "same wrongdoer." If a customer examines a statement and does not notify the bank of the first forgery within 30 days,the customer will be liable for future forgeries on the customer's account by the same wrongdoer.
Page Ref: 646
Topic: When a Bank May Charge a Customer's Account

Question 12

If a customer's ATM card is lost or stolen,the customer must notify the bank within ;if that is done,the customer is then liable for only the first stolen.

Accepted Answer

A)If a customer's ATM card is lost or stolen,the customer must notify the bank
within two days.The customer is then liable for only the first $50 stolen.
B)If a customer's ATM card is lost or stolen,the customer must notify the bank within two days.The customer is then liable for only the first $50 stolen.
C)If a customer's ATM card is lost or stolen,the customer must notify the bank within two days.The customer is then liable for only the first $50 stolen.
D)If a customer's ATM card is lost or stolen,the customer must notify the bank within two days.The customer is then liable for only the first $50 stolen.
E)If a customer's ATM card is lost or stolen,the customer must notify the bank within two days.The customer is then liable for only the first $50 stolen.
Page Ref: 650
Topic: Electronic Fund Transfers

Question 13

________ cards contain microchips for storing data that can be used to transfer funds.

Accepted Answer

A)Another,newer,type of e-money is the smart card.Smart cards are the same size
as regular check and ATM cards and look the same from the front.However,instead of having a magnetic strip,smart cards contain microchips for storing data.
B)Another,newer,type of e-money is the smart card.Smart cards are the same size as regular check and ATM cards and look the same from the front.However,instead of having a magnetic strip,smart cards contain microchips for storing data.
C)Another,newer,type of e-money is the smart card.Smart cards are the same size as regular check and ATM cards and look the same from the front.However,instead of having a magnetic strip,smart cards contain microchips for storing data.
Page Ref: 652
D)?Another,newer,type of e-money is the smart card.Smart cards are the same size as regular check and ATM cards and look the same from the front.However,instead of having a magnetic strip,smart cards contain microchips for storing data.
E)Another,newer,type of e-money is the smart card.Smart cards are the same size as regular check and ATM cards and look the same from the front.However,instead of having a magnetic strip,smart cards contain microchips for storing data.
Topic: E-Money and Online Banking

Question 14

Which of the following would be stored electronically on microchips,magnetic strips,or other computer media and would allow for the elimination of physical currency?

Accepted Answer

A)Digital cash,money stored electronically on microchips,magnetic strips,or other
computer media,would allow for the elimination of physical currency.
B)Digital cash,money stored electronically on microchips,magnetic strips,or other computer media,would allow for the elimination of physical currency.
C)Digital cash,money stored electronically on microchips,magnetic strips,or other computer media,would allow for the elimination of physical currency.
D)Digital cash,money stored electronically on microchips,magnetic strips,or other computer media,would allow for the elimination of physical currency.
E)Digital cash,money stored electronically on microchips,magnetic strips,or other computer media,would allow for the elimination of physical currency.
Page Ref: 651
Topic: E-Money and Online Banking

Question 15

Which of the following is defined by the UCC as a change,without consent,that nullifies the obligation of a party to the instrument?

Accepted Answer

A)The UCC defines an "alteration" as a change without consent)that modifies the
obligation of a party to the instrument.
B)The UCC defines an "alteration" as a change without consent)that modifies the obligation of a party to the instrument.
C)The UCC defines an "alteration" as a change without consent)that modifies the obligation of a party to the instrument.
D)The UCC defines an "alteration" as a change without consent)that modifies the obligation of a party to the instrument.
E)The UCC defines an "alteration" as a change without consent)that modifies the obligation of a party to the instrument.
Page Ref: 648
Topic: When a Bank May Charge a Customer's Account

Question 16

A[n] ________ is when money is transferred by an electronic terminal,telephone,or computer.

Accepted Answer

A)When money is transferred by an electronic terminal,telephone,or computer,
this transfer is called an electronic fund transfer EFT).
B)When money is transferred by an electronic terminal,telephone,or computer,this transfer is called an electronic fund transfer EFT).
C)When money is transferred by an electronic terminal,telephone,or computer,this transfer is called an electronic fund transfer EFT).
D)When money is transferred by an electronic terminal,telephone,or computer,this transfer is called an electronic fund transfer EFT).
E)When money is transferred by an electronic terminal,telephone,or computer,this transfer is called an electronic fund transfer EFT).
Page Ref: 649
Topic: Electronic Fund Transfers

Question 17

Under the ________,a bank has a duty to pay checks from a customer's account so long as the check is properly payable.

Accepted Answer

A)Under the properly payable rule,the bank has a duty to pay checks from the
customer's account as long as the check is "properly payable" [UCC 4-401a)].
B)Under the properly payable rule,the bank has a duty to pay checks from the customer's account as long as the check is "properly payable" [UCC 4-401a)].
C)Under the properly payable rule,the bank has a duty to pay checks from the customer's account as long as the check is "properly payable" [UCC 4-401a)].
D)Under the properly payable rule,the bank has a duty to pay checks from the customer's account as long as the check is "properly payable" [UCC 4-401a)].
E)Under the properly payable rule,the bank has a duty to pay checks from the customer's account as long as the check is "properly payable" [UCC 4-401a)].
Page Ref: 638
Topic: When a Bank May Charge a Customer's Account

Question 18

A check must be presented to a bank within ________ of its date,or the check is considered a stale check.

Accepted Answer

A)If a check is not presented to a bank within six months of its date,the check is
considered a stale check.
B)If a check is not presented to a bank within six months of its date,the check is considered a stale check.
C)If a check is not presented to a bank within six months of its date,the check is considered a stale check.
D)If a check is not presented to a bank within six months of its date,the check is considered a stale check.
E)If a check is not presented to a bank within six months of its date,the check is considered a stale check.
Page Ref: 644
Topic: When a Bank May Charge a Customer's Account

Question 19

An oral stop payment order is valid for ________ unless the order is later confirmed in writing.

Accepted Answer

A)If a stop payment order is an oral order,it is valid for just 14 days unless the
order is later confirmed in writing.
B)If a stop payment order is an oral order,it is valid for just 14 days unless the order is later confirmed in writing.
C)If a stop payment order is an oral order,it is valid for just 14 days unless the order is later confirmed in writing.
D)If a stop payment order is an oral order,it is valid for just 14 days unless the order is later confirmed in writing.
E)If a stop payment order is an oral order,it is valid for just 14 days unless the order is later confirmed in writing.
Page Ref: 643
Topic: When a Bank May Charge a Customer's Account

Question 20

________ is a deposit that is preauthorized and performed on a customer's account through an electronic terminal.

Accepted Answer

A)A direct deposit or withdrawal is a preauthorized action performed on a
customer's account through an electronic terminal.
B)A direct deposit or withdrawal is a preauthorized action performed on a customer's account through an electronic terminal.
C)A direct deposit or withdrawal is a preauthorized action performed on a customer's account through an electronic terminal.
D)A direct deposit or withdrawal is a preauthorized action performed on a customer's account through an electronic terminal.
E)A direct deposit or withdrawal is a preauthorized action performed on a customer's account through an electronic terminal.
Page Ref: 650
Topic: Electronic Fund Transfers

Quiz 29: Checks and Electronic Fund Transfers