TRUE/FALSE QUESTIONS A1 A cashier’s check is an...

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CHAPTER 27: CHECKS, THE BANKING SYSTEM, AND E-MONEY 275 Chapter 27 Checks and Banking in the Digital Age TRUE/FALSE QUESTIONS A1. A cashier’s check is an instrument in which a bank draws a check on itself. PAGE: 544 TYPE: = NAT: AACSB Analytic AICPA Legal
B1. UCC Articles 3 and 4 govern checks. PAGE: 544 TYPE: = NAT: AACSB Analytic AICPA Legal
A2. A bank that has certified a check is under no obligation to accept it. PAGE: 545 TYPE: =
NAT: AACSB Analytic AICPA Legal B2. A check is a special type of certificate of deposit. ANSWER: F PAGE: 544 TYPE: N NAT: AACSB Analytic AICPA Legal A3. A person who writes a bad check is subject to a civil suit only. PAGE: 546 TYPE: =
NAT: AACSB Analytic AICPA Legal B3. Certified checks are instruments that have been accepted for payment by the institutions on which they are drawn.
276 TEST BANK A—UNIT FIVE: NEGOTIABLE INSTRUMENTS PAGE: 545 TYPE: =
NAT: AACSB Analytic AICPA Legal A4. A drawer is liable to the holder of a check if the check is not honored. PAGE: 547 TYPE: =
NAT: AACSB Analytic AICPA Legal B4. A bank is subject to a civil suit if its customer writes a bad check. PAGE: 546 TYPE: = NAT: AACSB Analytic AICPA Legal
A5. Once a check “ bounces,” a holder cannot resubmit it for payment. PAGE: 547 TYPE: = NAT: AACSB Analytic AICPA Legal
B5. Generally, a bank has no obligation to pay a customer’s overdrafts. PAGE: 547 TYPE: = NAT: AACSB Analytic AICPA Legal
A6. The death of a customer revokes a bank’s authority to pay an item. PAGE: 547 TYPE: N NAT: AACSB Analytic AICPA Legal
B6. When a check “bounces,” its holder can resubmit the check later, hop ing that suf ficient funds will be available. PAGE: 547 TYPE: =
NAT: AACSB Analytic AICPA Legal A7. A stale check is one that has been outstanding for longer than one month. PAGE: 547 TYPE: =
NAT: AACSB Analytic AICPA Legal B7. A bank has no right to charge a customer’s account for the amount of a stale check.
CHAPTER 27: CHECKS, THE BANKING SYSTEM, AND E-MONEY 277 PAGE: 547 TYPE: =
NAT: AACSB Analytic AICPA Legal A8. An oral stop payment order is valid for fourteen days. ANSWER: T PAGE: 548 TYPE: = NAT: AACSB Analytic AICPA Legal B8. The incompetence of a customer revokes a bank’s authority to pay an item. PAGE: 547 TYPE: N
NAT: AACSB Analytic AICPA Legal A9. A bank that pays a customer’s check with a forged drawer’s signature can generally pass the loss onto the customer. PAGE: 549 TYPE: N NAT: AACSB Analytic AICPA Legal

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