Ch15-TB-BLTE-8e

Ch15-TB-BLTE-8e - Chapter15 ChecksandBanking intheDigitalAge

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Chapter 15 Checks and Banking in the Digital Age TRUE/FALSE QUESTIONS 1. A check orders a bank to pay a fixed amount of money on demand. ANSWER: T PAGE: 446 TYPE: N MISC : AACSB Analytic Skill Level: AICPA Legal 2. Under the UCC, a bank is “a person engaged in the business of banking.” ANSWER: T PAGE: 446 TYPE: N MISC: AACSB Analytic Skill Level: AICPA Legal 3. A cashier’s check is an instrument in which a bank draws a check on itself. ANSWER: T PAGE: 446 TYPE: = MISC: AACSB Analytic Skill Level: AICPA Legal 4. When a bank certifies a check, it immediately charges the drawer’s account. ANSWER: T PAGE: 447 TYPE: N MISC: AACSB Analytic Skill Level: AICPA Legal 5. A bank that has certified a check is under no obligation to accept it. ANSWER: F PAGE: 447 TYPE: = MISC: AACSB Analytic Skill Level: AICPA Legal 6. A bank’s duty to honor its customers’ checks is absolute. 223
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224 TEST BANK TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS ANSWER: F PAGE: 448 TYPE: = MISC: AACSB Analytic Skill Level: AICPA Legal
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CHAPTER 15: CHECKS AND BANKING IN THE DIGITAL AGE 225 7. To transfer checkbook dollars among different banks, each bank acts as an  agent of collection for its customer. ANSWER: T PAGE: 448 TYPE: = MISC: AACSB Analytic Skill Level: AICPA Legal 8. A person who writes a bad check is subject to a civil suit only. ANSWER: F PAGE: 448 TYPE: = MISC: AACSB Analytic Skill Level: AICPA Legal 9. A bank is subject to a civil suit if its customer writes a bad check. ANSWER: F PAGE: 448 TYPE: = MISC: AACSB Analytic Skill Level: AICPA Legal 10. A drawee bank may be liable to its drawer customer if the bank refuses to  honor the drawer’s check when there are sufficient funds in the account. ANSWER: T PAGE: 448 TYPE: = MISC: AACSB Analytic Skill Level: AICPA Legal 11. Generally, a bank has no obligation to pay a customer’s overdrafts. ANSWER: T PAGE: 449 TYPE: = MISC: AACSB Analytic Skill Level: AICPA Legal 12. A drawer is liable to the holder of a check if the check is not honored. ANSWER: T PAGE: 449 TYPE: = MISC: AACSB Analytic Skill Level: AICPA Legal 13. Once a check “bounces,” a holder cannot resubmit it for payment. ANSWER: F PAGE: 449 TYPE: N MISC: AACSB Analytic Skill Level: AICPA Legal 14. A stale check is one that has been outstanding for longer than six months. ANSWER: T PAGE: 450 TYPE: + MISC: AACSB Analytic Skill Level: AICPA Legal
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TEST BANK TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS 15. An oral stop payment order is valid for fourteen days. ANSWER:
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Ch15-TB-BLTE-8e - Chapter15 ChecksandBanking intheDigitalAge

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