Miller does the payroll for XYZ Company.In between the last names of Adams and Bates, he inserts the name Appleton and makes out a weekly paycheck in that name.He keeps the check for himself, signing "Appleton" and cashing it at a local bank.Auditors discovered the fake payee many months later.May XYZ require the bank to recredit?

Question

Quizplus · Accepted Answer

The fictitious payee rule applies because Miller, an employee of XYZ, created a fake payee. Under this rule, the bank is not liable for recrediting the account as the company is considered to have authorized the issuance of the check.

Miller Does the Payroll for XYZ Company