TJ_Comp 20_TB_Ch31

TJ_Comp 20_TB_Ch31 - Chapter 31CHECKS AND FUNDS TRANSFERS...

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Chapter 31—CHECKS AND FUNDS TRANSFERS TRUE/FALSE 1. A check is a particular kind of draft. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 2. The drawee of a check is always a bank. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 3. A check is drawn on the assumption that the bank has sufficient funds in the drawer's account for pay- ment. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 4. Most states provide that if a dishonored check is not made good within a stated period of time, it will be presumed that the check was originally issued with the intent to defraud. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 5. In the case of either a check or a draft, the drawer may be held civilly liable if the instrument is dis- honored. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 6. To be effective, checks must be executed on forms that are printed expressly for that purpose and is- sued by a bank or other financial institution. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 7. Except for postdated checks, checks are payable on demand. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 8. The delivery of a check is regarded as an assignment of money on deposit, and the drawee bank is re- quired to pay the holder the amount of the check. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 9. When a bank certifies a check, the amount involved in the certification will be retained in the deposit- or's account until payment of the certified check. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 10. A check may be certified by a bank on request of the drawer or the holder. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 11. A drawer of a check, unlike the drawer of a draft, will not be discharged from liability if proper notice of dishonor is not given the drawer of the check.
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ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 12. A bank may provide detailed information on the accounts of its customer on the request of a reputable business or a law enforcement agency without the consent of its customer. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 13. A bank is required to pay a check presented more than six months after its date. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 14. A buyer may stop payment on a certified check issued to a seller if the goods are defective when re- ceived. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 15. A written stop payment order is effective for one year. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 16. The act of stopping payment on a check imposes no liability on the depositor. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 17. Although a drawer has stopped payment on a check, the drawer still may be held liable on the check unless the drawer has a defense that will defeat the holder in a lawsuit. ANS: T
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This note was uploaded on 02/22/2012 for the course BUS BUS212 taught by Professor Manney during the Spring '12 term at FSU.

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TJ_Comp 20_TB_Ch31 - Chapter 31CHECKS AND FUNDS TRANSFERS...

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