Multiple choice
1. Eric wrote Donna a check for $50. Eric accidentally dated the check 3/1/07, even though it was actually 3/1/08 when he wrote the check. Eric thought that there was $75 in the account, but there was actually only $10 in the account. Which one of the following scenarios is most likely to occur?
A. The bank will not honor the check because it’s stale.
B. The bank will not honor the check because it’s postdated.
C. The bank will honor the check, even though it will result in an overdraft.
D. The bank will honor the check, even though a stop-payment order has been made.
2. Erica writes a $100 check to Sam. Sam takes the check to his bank, endorses the check, and deposits it into his bank. This process is best described as
A. transfer by assignment.
B. taking for value.
C. transfer by negotiation.
D. transfer to a holder in due course.
3. Sara wrote a check to Steven in the amount of $100 to be drawn from her account at Big Money Bank. When took the check to Big Money Bank to be cashed, Big Money refused to pay the check because Sara’s deposit wasn’t made in time to be credited to her account for that day and wouldn’t be available until the next day. Which of the following is true about this turn of events?
A. Sara is liable to Steven for the $100.
B. Sara is not liable to Steven for the $100.
C. Big Money Bank is liable to Sara for the $100.
D. Big Money Bank is liable to Steven for the $100.
4. Joan noticed one day that her bank debit card was missing from her purse. Joan notified her bank immediately. When Joan received her statement the next month, the bank charged her $500 for withdrawals made after the debit card disappeared. Which one of the following laws do the charged violate?
A. Federal Trade Commission Act of 1914
B. Electronic Fund Transfer Act of 1978
C. Banking Act of 1999
D. Electronic Communications Privacy Act of 1986
