D drew a $100 check on ABC Bank payable "to the order of P." P cashed the check at First Bank.First Bank is an agent of P until the drawee bank pays the check.

Question

Quizplus · Accepted Answer

When P cashes the check at First Bank, First Bank becomes P's agent until the check is paid by ABC Bank (the drawee bank). This is because First Bank is advancing funds to P on the assumption that ABC Bank will honor the check and pay the funds to First Bank. Once ABC Bank pays the check, First Bank is no longer acting as P's agent.

D Drew a $100 Check on ABC Bank Payable "To