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
A)Daisy will be liable for the amount.
B)Ewan will have to pay Daisy for the amount.
C)Finance Bank will have to recredit Daisy's account.
D)the Federal Reserve will reimburse all parties for their costs.

Question

Quizplus · Accepted Answer

Finance Bank will have to recredit Daisy's account because it is the bank's responsibility to verify the authenticity of endorsements on checks drawn on its accounts. When the bank pays out on a forged endorsement, it typically must bear the loss and recredit the account of the person who wrote the check, in this case, Daisy.

Daisy Signs a Check "Pay to the Order of Ewan