Q&A Hero

Q: Which of the following is not an element that a party must meet to be considered a holder in due course? A. The party must be a holder of a complete and authentic negotiable instrument. B. The holder must take the instrument for value. C. The holder must take the instrument in good faith. D. The holder must take the instrument without notice of defects. E. The holder must either pay for the instrument or receive it as a gift.

Q: If an instrument has been refused by a bank despite a holder's presenting it in a timely and proper manner, that payment has been dishonored.

Q: A party who signs an instrument to provide credit for another party, who has also signed the instrument, is an accommodation party.

Q: If a transfer is through an endorsement, the transfer warranties apply to any future holder. However, if the transfer does not occur through endorsement, the warranties apply only to the transferee.

Q: If Alice makes a proper tender of the full payment of $1,000 due on Richard's note on the note's due date, but Richard improperly refuses to accept the money, Alice will still be liable for the $1,000, but will not have to pay any interest on the amount.

Q: Liability attributed when the transfer of an instrument breaches a warranty associated with an instrument is called signature liability.

Q: According to the UCC, a signature can be any name, word, mark, or symbol used by a party to authenticate a writing.

Q: A party who is primarily liable on an instrument must pay the stated amount when it is presented for payment and make the payment without resorting to any other party.

Q: When an item is transferred, the transferee acquires all the rights the transferor had to the item under the shelter principle.

Q: The purpose of the shelter principle is to protect the holder from losing holder in due course status.

Q: Under FTC regulations, to ensure that complaints do not abuse its status, a subsequent holder of a contract will have the rights of a holder in due course.

Q: A bank has given value for a negotiable instrument to the extent that the bank has a security interest in the instrument.

Q: The UCC's definition of good faith is strictly an objective standard.

Q: A time instrument becomes overdue at any date after the expressed due date on the instrument.

Q: The defenses of lack or failure of consideration, breach of contract, and fraud in the inducement in the underlying contract cannot be used against a holder in due course.

Q: If someone forgets to write the date on a check, the UCC allows the holder to complete the check by writing the date as long as it is consistent with the intent of the writer.

Q: Receiving an instrument as a gift satisfies the holder in due course requirement of taking an instrument for value.

Q: The "for value" requirement of the UCC section 3-302 is the same as taking something with consideration.

Q: Someone who acquires a negotiable instrument in good faith is a holder in due course.

Q: A payee may not be a holder in due course.

Q: Under UCC 3-302, a party may be a holder in due course of a non-negotiable instrument.

Q: Set forth the requirements generally required for a check to be considered properly payable.

Q: What is the difference between a cashier's check and a certified check? Can a bank refuse to certify a check? Assuming the payment is valid, can a bank refuse to issue a cashier's check?

Q: The purpose of holder-in-due-course status is to protect the seller of goods under the UCC.

Q: Set forth the six requirements for an instrument to be negotiable.

Q: Anne orally promises Judy that in return for Judy washing Anne's dog, Anne unconditionally promises to pay Judy $50 the next Wednesday. Is a contract formed, is it negotiable, and why or why not?

Q: What does the Truth-in-Savings Act require regarding information to be provided to customers before accounts are opened?

Q: Stolen Purses. Sandra and Mary were having lunch at their favorite restaurant. Unfortunately, a thief stole their purses containing their ATM cards. Mary notified her bank the next day of the theft of the ATM card. Unfortunately, the card had already been used to fraudulently obtain over $1,000. Sandra thought back to her business law class and did not call her bank, however, because she believed that she would not be liable for any charges on the ATM card because of the rules involving forgeries. Nevertheless, a week or so later when Sandra was in the bank, she casually mentioned to the teller that she needed a new card because hers had been lost. She was shocked when a bank representative attempted to hold her responsible for hundreds of dollars of goods bought with the ATM. Sandra told the bank representative that she refused to cover the amounts, that she was moving her account, and that she wanted all preauthorized payments and EFTs stopped immediately. Which of the following is true regarding the bank's obligation to stop EFT transfers? A. The bank must immediately end any EFTs on the same day requested so long as the request is made during regular business hours. B. The bank must end any EFT payments on the same day requested so long as the request is made by 2 p.m. C. The bank must stop any EFT payments so long as the request is made within 48 hours of the EFT authorization. D. The bank must stop any EFT payments so long as the request is made within five days of the EFT authorization. E. The bank could not stop payment because EFT transfers occur instantaneously.

Q: What is the difference between a demand negotiable instrument and a time negotiable instrument?

Q: Describe a traveler's check setting forth the elements necessary for its proper payment.

Q: Used Car Commission. William promised to sell Helen's car for her, but he wanted a commission of 10%. Helen signed an instrument promising to pay William a 10% commission if he sold her car. William assigned the agreement to Phil. Helen's car was sold and the buyer paid Helen. A dispute ensued between Helen and William regarding whether William found the buyer or the buyer found Helen. When Phil asked Helen for payment on the instrument, Helen refused. William, Helen, and Phil settled their dispute without going to court, and Helen wrote Phil a check for $3,000. Phil endorsed the check on the back planning to take it to the bank the next day. Unfortunately, Phil lost the check that was found by Barry and cashed by the local bank. Barry then left town. Which of the following is the most likely result if Phil attempts to require that the bank reimburse him for the value of the check cashed by Barry? A. The check was an order instrument, and the bank must take the loss because it should only have provided funds to Phil. B. Because the check was an order instrument, the bank was within its rights to pay Barry because he presented the check; and Phil has no rights against the bank. C. Because the check was a bearer instrument, the bank must take the loss because it should only have provided the funds to Phil. D. Because the check was a bearer instrument, the bank was authorized to pay Barry; and Phil has no rights against the bank. E. Regardless of what type of instrument the check was, the bank had no right to cash the check when presented by Barry unless the bank can establish by a preponderance of the evidence that Barry misrepresented himself as an agent of Phil.

Q: Stolen Purses. Sandra and Mary were having lunch at their favorite restaurant. Unfortunately, a thief stole their purses containing their ATM cards. Mary notified her bank the next day of the theft of the ATM card. Unfortunately, the card had already been used to fraudulently obtain over $1,000. Sandra thought back to her business law class and did not call her bank, however, because she believed that she would not be liable for any charges on the ATM card because of the rules involving forgeries. Nevertheless, a week or so later when Sandra was in the bank, she casually mentioned to the teller that she needed a new card because hers had been lost. She was shocked when a bank representative attempted to hold her responsible for hundreds of dollars of goods bought with the ATM. Sandra told the bank representative that she refused to cover the amounts, that she was moving her account, and that she wanted all preauthorized payments and EFTs stopped immediately. For how much can the bank hold Mary responsible based on the fraudulent use of the card? A. Nothing B. $50 C. $100 D. $500 E. For everything charged prior to the time she gave notice

Q: Stolen Purses. Sandra and Mary were having lunch at their favorite restaurant. Unfortunately, a thief stole their purses containing their ATM cards. Mary notified her bank the next day of the theft of the ATM card. Unfortunately, the card had already been used to fraudulently obtain over $1,000. Sandra thought back to her business law class and did not call her bank, however, because she believed that she would not be liable for any charges on the ATM card because of the rules involving forgeries. Nevertheless, a week or so later when Sandra was in the bank, she casually mentioned to the teller that she needed a new card because hers had been lost. She was shocked when a bank representative attempted to hold her responsible for hundreds of dollars of goods bought with the ATM. Sandra told the bank representative that she refused to cover the amounts, that she was moving her account, and that she wanted all preauthorized payments and EFTs stopped immediately. For how much can the bank hold Sandra responsible based on the fraudulent use of the card? A. Nothing B. $50 C. $100 D. $500 E. For everything charged prior to the time she gave notice

Q: Stolen Purses. Sandra and Mary were having lunch at their favorite restaurant. Unfortunately, a thief stole their purses containing their ATM cards. Mary notified her bank the next day of the theft of the ATM card. Unfortunately, the card had already been used to fraudulently obtain over $1,000. Sandra thought back to her business law class and did not call her bank, however, because she believed that she would not be liable for any charges on the ATM card because of the rules involving forgeries. Nevertheless, a week or so later when Sandra was in the bank, she casually mentioned to the teller that she needed a new card because hers had been lost. She was shocked when a bank representative attempted to hold her responsible for hundreds of dollars of goods bought with the ATM. Sandra told the bank representative that she refused to cover the amounts, that she was moving her account, and that she wanted all preauthorized payments and EFTs stopped immediately. Which of the following is true regarding the bank's obligation to end preauthorized payments? A. The bank must immediately end preauthorized payments on the same day requested so long as the request is made during regular business hours. B. The bank must end preauthorized payments on the same day requested so long as the request is made by 2 p.m. C. The customer must notify the bank to stop the payment at least three days before the preauthorized payment is scheduled. D. The customer must notify the bank to stop the payment at least five days before the preauthorized payment is scheduled. E. The customer must notify the bank to stop the payment at least ten days before the preauthorized payment is scheduled.

Q: Yard Mowing. Paula agreed to mow John's yard once a week for $50 per week throughout the summer. Paula, however, was having trouble getting her money from John. On one occasion, he in handwriting gave her an IOU stating "I, John Jones, owe Paula Smith $50" which he signed at the end. A couple of weeks later, John did not have the money with which to pay Paula for additional mowing, and he handwrote the following on a piece of paper and gave it to her: "I, John Jones, promise to pay Paula Smith or to bearer, the sum of $100 on Monday, July 22, 2012." Paula quit mowing John's yard, and disgusted with John, Paula assigned both documents to Vince. When Vince presented the documents to John, John refused to pay on the basis that after inspecting the yard, he decided that Paula was doing a poor job. Vince told him the documents constituted negotiable instruments, but John disagreed. Which of the following is true regarding whether the handwritten statement "I, John Jones, owe Paula Smith $50" coupled with the signature of John Jones is sufficient to constitute a negotiable instrument? A. The instrument is negotiable because John Jones signed following the statement of debt. B. The instrument is negotiable regardless of whether John Jones additionally signed following the statement of debt. C. The instrument is negotiable only so long as Paula Smith does not attempt to transfer the document to anyone. D. The instrument is not negotiable because the amount due to Paula was overdue when the IOU was made. E. Acknowledging a debt through an IOU does not create an unconditional promise or order to pay.

Q: Used Car Commission. William promised to sell Helen's car for her, but he wanted a commission of 10%. Helen signed an instrument promising to pay William a 10% commission if he sold her car. William assigned the agreement to Phil. Helen's car was sold and the buyer paid Helen. A dispute ensued between Helen and William regarding whether William found the buyer or the buyer found Helen. When Phil asked Helen for payment on the instrument, Helen refused. William, Helen, and Phil settled their dispute without going to court, and Helen wrote Phil a check for $3,000. Phil endorsed the check on the back planning to take it to the bank the next day. Unfortunately, Phil lost the check that was found by Barry and cashed by the local bank. Barry then left town. Which of the following is true regarding the instrument signed by Helen promising to pay William a 10% commission if he sold her car? A. The instrument is negotiable. B. The instrument is not negotiable only because it is based on a condition. C. The instrument is not negotiable only because Helen is not a merchant. D. The instrument is not negotiable only because it is not for a sum certain. E. The instrument is not negotiable because it is based on a condition and also because it is not for a sum certain.

Q: Used Car Commission. William promised to sell Helen's car for her, but he wanted a commission of 10%. Helen signed an instrument promising to pay William a 10% commission if he sold her car. William assigned the agreement to Phil. Helen's car was sold and the buyer paid Helen. A dispute ensued between Helen and William regarding whether William found the buyer or the buyer found Helen. When Phil asked Helen for payment on the instrument, Helen refused. William, Helen, and Phil settled their dispute without going to court, and Helen wrote Phil a check for $3,000. Phil endorsed the check on the back planning to take it to the bank the next day. Unfortunately, Phil lost the check that was found by Barry and cashed by the local bank. Barry then left town. Before Phil endorsed the check it was a(n) ______ instrument; and after he endorsed it, the check was a(n) _____ instrument. A. order; order B. order; transactional C. order; bearer D. transactional; bearer E. transactional, order

Q: Yard Mowing. Paula agreed to mow John's yard once a week for $50 per week throughout the summer. Paula, however, was having trouble getting her money from John. On one occasion, he in handwriting gave her an IOU stating "I, John Jones, owe Paula Smith $50" which he signed at the end. A couple of weeks later, John did not have the money with which to pay Paula for additional mowing, and he handwrote the following on a piece of paper and gave it to her: "I, John Jones, promise to pay Paula Smith or to bearer, the sum of $100 on Monday, July 22, 2012." Paula quit mowing John's yard, and disgusted with John, Paula assigned both documents to Vince. When Vince presented the documents to John, John refused to pay on the basis that after inspecting the yard, he decided that Paula was doing a poor job. Vince told him the documents constituted negotiable instruments, but John disagreed. Which of the following is true regarding the effect on negotiability of John's determination that Paula did a poor job mowing the yard? A. Paula's performance prevents the instruments from being negotiable only if John meets the burden of proof of establishing to the judge by a preponderance of the evidence that Paula did a poor job mowing the yard. B. Paula's performance prevents the instruments from being negotiable only if Paula meets the burden of proof of establishing to the judge by a preponderance of the evidence that she did an acceptable job mowing the yard. C. Paula's performance prevents the instruments from being negotiable only if John meets the burden of proof of establishing to the judge by a preponderance of the evidence that Paula did a poor job mowing the yard, and if Paula signed a document agreeing that the instrument would lack negotiability unless she properly performed. D. Paula's performance prevents the instruments from being negotiable only if Paula meets the burden of proof of establishing to the judge by a preponderance of the evidence that she did an acceptable job mowing the yard and that she did not sign any document agreeing that the instrument would lack negotiability upon John's objection. E. Manner of performance is not one of the listed elements for a finding of negotiability.

Q: Yard Mowing. Paula agreed to mow John's yard once a week for $50 per week throughout the summer. Paula, however, was having trouble getting her money from John. On one occasion, he in handwriting gave her an IOU stating "I, John Jones, owe Paula Smith $50" which he signed at the end. A couple of weeks later, John did not have the money with which to pay Paula for additional mowing, and he handwrote the following on a piece of paper and gave it to her: "I, John Jones, promise to pay Paula Smith or to bearer, the sum of $100 on Monday, July 22, 2012." Paula quit mowing John's yard, and disgusted with John, Paula assigned both documents to Vince. When Vince presented the documents to John, John refused to pay on the basis that after inspecting the yard, he decided that Paula was doing a poor job. Vince told him the documents constituted negotiable instruments, but John disagreed. What is the effect of the instruments being written by hand? A. Handwriting does not prevent the instruments from being considered negotiable only because neither Paula nor John would be considered merchants in the transactions at issue. B. Handwriting does not prevent the instruments from being considered negotiable only because John would not be considered a merchant in the transaction at issue, and Paula's status as a merchant is irrelevant. C. Handwriting does not prevent the instrument from being considered negotiable only because Paula would not be considered a merchant in the transaction at issue, and John's status as a merchant is irrelevant. D. Handwriting does not prevent the IOU instrument from being negotiable, but it does prevent the other instrument from being negotiable. E. The issue of the instruments being handwritten does not prevent either from being considered negotiable.

Q: Yard Mowing. Paula agreed to mow John's yard once a week for $50 per week throughout the summer. Paula, however, was having trouble getting her money from John. On one occasion, he in handwriting gave her an IOU stating "I, John Jones, owe Paula Smith $50" which he signed at the end. A couple of weeks later, John did not have the money with which to pay Paula for additional mowing, and he handwrote the following on a piece of paper and gave it to her: "I, John Jones, promise to pay Paula Smith or to bearer, the sum of $100 on Monday, July 22, 2012." Paula quit mowing John's yard, and disgusted with John, Paula assigned both documents to Vince. When Vince presented the documents to John, John refused to pay on the basis that after inspecting the yard, he decided that Paula was doing a poor job. Vince told him the documents constituted negotiable instruments, but John disagreed. Disregarding the issue of whether Paula properly performed, is the statement "I, John Jones, promise to pay Paula Smith or to bearer, the sum of $100 on Monday, July 22, 2012," without a signature anywhere else on the document, sufficient to satisfy negotiability requirements? A. Yes, because it is in handwriting. B. Yes, it is sufficient regardless of whether it is in handwriting or not because it contains an unconditional promise to pay. C. No, because it was not signed at the bottom. D. Yes, but only if John later signed another document confirming that he meant the handwritten statement to constitute his signature. E. No, because it was not signed at the bottom or anywhere else on the document.

Q: Book Payment. Molly and Pat signed a contract providing that "Pat will furnish the correct used business law book for use in Molly's business law class; and in return on August 15, 2011, Molly promises to pay Pat $50 for the book." Molly took the book and planned to pay Pat. Meanwhile, Pat properly assigned the contract Molly had signed to Jack. When Molly went to class, however, she discovered that the book was the incorrect book. When Jack asked Molly for payment, Molly refused. Molly told Jack that the book was useless to her and that she was not paying either him or Pat anything for it. Jack told Molly that he had an enforceable assignment in the form of a negotiable instrument and that he could collect regardless of whether the book was useless. Molly did not believe him. Continuing with her attempt to save money on books, Molly agreed to buy Tim's U.S. history book for $40. She had an oral agreement with Tim that he would give her the book and that she would pay him in three days. This time Molly got the right book. Tim, in writing, properly assigned the right to the $40 payment to Richard. Richard asked Molly for the money. Molly admitted her agreement with Tim but told Richard that she was not going to pay him because he did not have a negotiable instrument. Molly also purchased a communications book from Sam promising in writing to give him in return the next day, to his order, a used DVD player she owned. What is the effect of Molly agreeing to give Sam a DVD in return for the book? A. Molly and Sam have an enforceable contract, and Molly has also satisfied the negotiability condition regarding the form of payment. B. Because payment is not in a sum certain for money, Molly and Sam do not have an enforceable contract nor does the agreement satisfy the negotiability requirement. C. Molly and Sam have an enforceable contract, but the agreement fails to satisfy the negotiability requirement that payment be in a sum certain in money. D. Because payment is not in a sum certain for money, Molly and Sam do not have an enforceable contract; but the requirement of negotiability regarding the form of payment has been satisfied. E. Unless Sam acknowledges in writing that the fair market value of the DVD is equivalent to the value of the book he provided to Molly, there is no enforceable contract nor is the agreement negotiable.

Q: Susie Smith signed a note agreeing to pay, "Annie Greene, Mary Hodge," $1,000. The payment was for painting her house. An issue with the note was that it spelled Annie's last name, "Greene," whereas Annie spells it simply, "Green." Annie and Mary had a disagreement regarding how to split up the funds for painting the house. Annie proceeded to sign the note on the back, "Annie Green," and presented it to Bill Brown to satisfy a debt that she owed him. Bill Brown endorsed the note on the back and took it to the bank for payment. Mary is unhappy because she did not obtain any of the funds and stated that Annie could not legally endorse the instrument because it misspelled her name and also because Mary did sign it. Which of the following is true regarding the complaint of Mary that she did not also endorse the instrument? A. She is correct because both names are required in order to provide legal endorsement. B. She is correct in that her name was needed for legal endorsement, but that is only the case because of the misspelling of Annie's name. C. She is correct because regardless of whether the payees are listed with no designation as to whether they are alternate or joint, or whether the words, "or," or "and," are used to designated payees, any listed payee must endorse a note in order for it to be properly payable. D. She is incorrect because Annie properly endorsed the note, and only her signature was needed. E. She is incorrect, but only if it can be established that Bill Brown lacked knowledge that she had not given her consent to the form of the endorsement.

Q: Book Payment. Molly and Pat signed a contract providing that "Pat will furnish the correct used business law book for use in Molly's business law class; and in return on August 15, 2011, Molly promises to pay Pat $50 for the book." Molly took the book and planned to pay Pat. Meanwhile, Pat properly assigned the contract Molly had signed to Jack. When Molly went to class, however, she discovered that the book was the incorrect book. When Jack asked Molly for payment, Molly refused. Molly told Jack that the book was useless to her and that she was not paying either him or Pat anything for it. Jack told Molly that he had an enforceable assignment in the form of a negotiable instrument and that he could collect regardless of whether the book was useless. Molly did not believe him. Continuing with her attempt to save money on books, Molly agreed to buy Tim's U.S. history book for $40. She had an oral agreement with Tim that he would give her the book and that she would pay him in three days. This time Molly got the right book. Tim, in writing, properly assigned the right to the $40 payment to Richard. Richard asked Molly for the money. Molly admitted her agreement with Tim but told Richard that she was not going to pay him because he did not have a negotiable instrument. Molly also purchased a communications book from Sam promising in writing to give him in return the next day, to his order, a used DVD player she owned. Which of the following is true regarding Jack's claim that he had a negotiable instrument and could collect from Molly? A. Jack is correct. B. The document is not negotiable because it does not contain words of negotiability or words indicating it is a bearer instrument. C. The document is not negotiable because the book was the wrong book. D. The document is not negotiable because Jack was not a party to the original contract. E. The document is not negotiable because it does not contain words of negotiability or words indicating it is a bearer instrument, and also because Molly received the wrong book.

Q: Book Payment. Molly and Pat signed a contract providing that "Pat will furnish the correct used business law book for use in Molly's business law class; and in return on August 15, 2011, Molly promises to pay Pat $50 for the book." Molly took the book and planned to pay Pat. Meanwhile, Pat properly assigned the contract Molly had signed to Jack. When Molly went to class, however, she discovered that the book was the incorrect book. When Jack asked Molly for payment, Molly refused. Molly told Jack that the book was useless to her and that she was not paying either him or Pat anything for it. Jack told Molly that he had an enforceable assignment in the form of a negotiable instrument and that he could collect regardless of whether the book was useless. Molly did not believe him. Continuing with her attempt to save money on books, Molly agreed to buy Tim's U.S. history book for $40. She had an oral agreement with Tim that he would give her the book and that she would pay him in three days. This time Molly got the right book. Tim, in writing, properly assigned the right to the $40 payment to Richard. Richard asked Molly for the money. Molly admitted her agreement with Tim but told Richard that she was not going to pay him because he did not have a negotiable instrument. Molly also purchased a communications book from Sam promising in writing to give him in return the next day, to his order, a used DVD player she owned. Which of the following is true regarding Molly's assertion that Richard did not have a negotiable instrument? A. Molly is incorrect, and the document by which Tim assigned the right to Richard is a negotiable instrument in regard to her duty to pay. B. Molly is correct because her agreement with Tim was not in a writing containing words of negotiability or words indicating the presence of a bearer instrument. C. Molly is correct because Richard was not a party to the original contract. D. Molly is incorrect because her admission establishes the existence of a negotiable instrument between her and Tim that could be assigned to Richard. E. Molly is correct because she did not immediately transfer funds to Tim and also because her agreement with Tim was not in a writing containing words of negotiability or words indicating the presence of a bearer instrument.

Q: ______________ time is the period between when a check is written and when it is presented for final payment. A. Transfer B. Electronic C. Chargeable D. Float E. Usable

Q: Which law controls how financial institutions handle customer information, ultimately providing greater privacy protections to financial institution customers? A. The Gramm-Leach Bliley Act B. The Gorhan-Bell Act C. The Customer Privacy Act D. The Requisite Privacy Act E. The Knight-Beecher Act

Q: Susie Smith signed a note agreeing to pay, "Annie Greene, Mary Hodge," $1,000. The payment was for painting her house. An issue with the note was that it spelled Annie's last name, "Greene," whereas Annie spells it simply, "Green." Annie and Mary had a disagreement regarding how to split up the funds for painting the house. Annie proceeded to sign the note on the back, "Annie Green," and presented it to Bill Brown to satisfy a debt that she owed him. Bill Brown endorsed the note on the back and took it to the bank for payment. Mary is unhappy because she did not obtain any of the funds and stated that Annie could not legally endorse the instrument because it misspelled her name and also because Mary did sign it. Which of the following is true regarding Mary's claim that the endorsement by Annie was illegal because the note misspelled Annie's name? A. Mary is correct. B. Mary is correct, but only because Annie signed the note, "Green," instead of "Greene," as such was on the note. C. Mary is correct, but only because two payees are listed. D. Mary is incorrect. E. Mary is incorrect unless she can prove that Susie intentionally and purposefully spelled the name wrong to prevent negotiation.

Q: Which of the following governs consumer fund transactions? A. The Electronic Fund Transfer Act of 1978. B. The Automated Transfer Act of 1990. C. The Electronic Banking Act of 2000. D. The Automated Fund Transfer Regulation of 2002. E. The Uniform Money Services Business Act of 1990.

Q: If a customer's ATM card is lost or stolen, the customer must notify the bank within _____ days; and if that is done, the customer is then liable for only the first _____ stolen. A. 5; $50 B. 3; $100 C. 2; $50 D. 7; $200 E. 1; $500

Q: Which of the following is money stored electronically on microchips, magnetic strips, or other computer media that would allow for the elimination of physical currency? A. Electronic funds. B. Electronic medium. C. Digital cash. D. Digital resources. E. Electronic resources.

Q: A plastic card containing magnetic strips with data regarding the value of the card is typically known as ____________. A. stored-value cards B. smart cards C. intel cards D. transfer cards E. electronic cards

Q: In the case of multiple forgeries by the same wrongdoer, if a customer examines a bank statement and does not notify the bank of the first forgery within the time required by the UCC, what is the effect on subsequent forgeries assuming the bank is not negligent? A. There is no effect because each forgery stands on its own. B. The customer is barred from recovering on the subsequent forgeries. C. The customer may recover on the subsequent forgeries if they are reported to the bank within 5 days after the statement showing the customer receives the forgery. D. The customer may recover on the subsequent forgeries if they are reported to the bank within 10 days after the statement showing the customer receives the forgery. E. The customer may recover on the subsequent forgeries if they are reported to the bank within 15 days after the statement showing the customer receives the forgery.

Q: Generally, assuming no negligence on the part of the victim, when an endorsement on a check has been forged and properly reported to the bank, which party is the party ultimately liable for the loss? A. The drawer. B. The first party to accept the forged instrument. C. The first legitimate endorser of the instrument. D. The bank of the first party to accept the forged instrument. E. The bank of the drawer even if proper notice was given of the forgery.

Q: Under the UCC, what is a change, without consent, that modifies the obligation of a party to the instrument? A. An alteration. B. A defacement. C. A material addition. D. A transformation. E. A reformation.

Q: The first ______ of any amount deposited in a bank must be available to the depositor on the business day following the day of deposit. A. $100 B. $200 C. $300 D. $400 E. $500

Q: If a check is not presented to a bank within ____________ of its date, the check is considered stale check. A. 30 days B. 90 days C. 6 months D. 9 months E. None of these because under the UCC, a check cannot be considered a stale check.

Q: A bank may determine that ______ or later is the cutoff hour for handling checks. A. noon B. 1:00 p.m. C. 2:00 p.m. D. 3:00 p.m. E. 4:00 p.m.

Q: The first bank that receives the check for payment is the _____________. A. payor B. payee C. depositary D. transfer E. acceptor

Q: The bank upon which a check is drawn is the ________________. A. payor B. payee C. depositary D. transfer E. acceptor

Q: Which of the following is a bank receiving a transferred check during a collection process (excluding the first bank and the last bank)? A. Depositary. B. Acknowledging. C. Collecting. D. Intermediary. E. Transferring.

Q: When the depositary bank is the same bank as the payer bank, the check is referred to as a(n) ______. A. on-us item B. combined item C. condensed item D. unitary item E. uniform item

Q: A(n) ______ check is a check that is accepted at the bank at which it is drawn. A. cashier's B. certified C. acknowledged D. transferred E. drawee

Q: Which of the following is false regarding certified checks? A. If a bank refuses to certify a check, the check is considered dishonored. B. Once a check is certified, funds of the customer are removed from his or her account and placed in the bank's certified check account. C. If a bank certifies a check, the drawer of the check is no longer liable for the amount of the check. D. If a bank certifies a check, the bank has become primarily liable for the check. E. All of these are false.

Q: According to UCC Section 3-312, certified or cashier's check are fully recoverable if the check is ______________________. A. lost B. stolen C. lost or stolen D. destroyed or stolen E. lost, stolen, or destroyed

Q: Which is the most common type of negotiable instrument in the United States that is regulated by the UCC? A. Money orders B. Certificates of Deposit C. Notes D. Demand instruments E. Checks

Q: Which of the following are considered banks under the UCC? A. Savings and loans. B. Credit unions. C. Trust companies. D. Savings and loans, credit unions, and trust companies. E. Savings and loans and credit unions, but not trust companies.

Q: In which of the following is the payee of a check a specific person, and the bank draws on itself? A. Certified. B. Agreed. C. Acknowledged. D. Cashier's. E. Promise.

Q: The party giving the order to pay on a draft is the __________________. A. drawer B. drawee C. payee D. draftor E. draftee

Q: The party ordered to pay on a draft is the ____________________. A. drawer B. drawee C. payee D. draftor E. draftee

Q: The party receiving the money from the draft is the ____________________. A. drawer B. drawee C. payee D. draftor E. draftee

Q: A(n) ______ is a specific draft that orders the bank to pay a fixed amount of money on demand. A. note B. promissory note C. check D. acknowledgment draft E. promissory draft

Q: Which of the following governs the transfer of checks between banks? A. Article 1 of the UCC. B. Article 2 of the UCC. C. Article 3 of the UCC. D. Article 4 of the UCC. E. Article 5 of the UCC.

Q: An instrument that reads, "Pay to the order of Jones or Green," is payable to _________ payees. A. joint B. concurrent C. consecutive D. alternative E. alternate

Q: An instrument that reads, "Pay to the order of Jones and Green," establishes _______ payees. A. joint B. concurrent C. consecutive D. alternative E. alternate

Q: What is the effect of an unqualified, blank endorsement? A. It turns previous order paper into bearer paper. B. It turns previous bearer paper into order paper. C. It turns a blank endorsement into a special endorsement. D. It turns an allonge into an endorsement. E. It turns an endorsement into an allonge.

Q: In the event of a misspelled name, how may the holder endorse the document? A. Only with the misspelled name. B. Only with the holder's actual name. C. With the holder's actual name or with the misspelled name. D. Endorsement is impossible in such a situation. E. With the misspelled name and also with a statement indicating to any later holder what the correct spelling should have been.

Q: Who may endorse an instrument made payable to a legal entity such as a partnership? A. The President only. B. The Chief Executive Officer only. C. The Chief Financial Officer only. D. The Treasurer only. E. Any authorized representative.

Q: If there is no room on an instrument for an endorsement or if all the room has been taken by previous endorsements, a(n) ______ may be attached. A. acknowledgement B. blank endorsement C. special endorsement D. allonge E. None of these. The instrument can no longer be endorsed.

Q: Which of the following are types of unqualified endorsements? A. Blank and special. B. Allonge and special. C. Allonge and blank. D. Qualified and blank. E. Qualified and special.

Q: Under UCC Section 3-205(b), which of the following is the payee's or last endorsee's signature and nothing else? A. A special endorsement. B. An allonge. C. A blank endorsement. D. A qualified endorsement. E. A restricted endorsement.