Business Law-Chapter 25

Question 1

Creditor-Debtor Relationship

Answer 1

A relationship that created when a customer deposits money into the bank; the customer is the creditor, and the bank is the debtor.

Question 2

Article 3 of the UCC

Answer 2

An article of the UCC that sets forth the requirements for negotiable instruments, including checks.

Question 3

Revised Article 3

Answer 3

A revision of Article 3 of the UCC

Question 4

Article 4 of the UCC

Answer 4

An article of the UCC that establishes the rules and principles that regulate bank deposit and collection procedures.

Question 5

Article 4A of the UCC

Answer 5

An article of the UCC that establishes rules regulating the creation and collection of and liability for wire transfers.

Question 6

Check

Answer 6

An order by a drawer to the drawee bank to pay a specified sum of money from the drawer’s checking account to the named payee (or holder)

Question 7

Drawer of a Check

Answer 7

The checking account holder and writer of a check.

Question 8

Drawee of a Check

Answer 8

The bake where a check drawer has her account.

Question 9

Payee of a Check

Answer 9

The party to whom a check is written.

Question 10

Indorsement of a Check

Answer 10

A payee’s signing of the back of a check in order to turn it over to another party.

Question 11

Indorser of a Check

Answer 11

A payee who indorses a check to another party.

Question 12

Indorsee of a Check

Answer 12

A party to whom a check is indorsed.

Question 13

Bank Check

Answer 13

A certified check of a cashier’s check, the payment for which a bank is solely or primarily liable.

Question 14

Certification

Answer 14

A process in which the accepting ban writes or stamps the word certified on an ordinary check of an account holder and sets aside funds from that account to pay the check.

Question 15

Certified Check

Answer 15

A type of check for which a bank agrees in advance (certifies) to accept the check when it is presented for payment.

Question 16

Cashier’s Check

Answer 16

A check issued by a bank for which the customer has paid the bank the amount of the check and a fee. The bank guarantees payment of the check.

Question 17

Honor

Answer 17

To pay a drawer’s properly drawn check.

Question 18

Stale Check

Answer 18

A check that has been outstanding for more than six months.

Question 19

Postdated Check

Answer 19

A check that a drawer doe not want cashed until sometime in the future.

Question 20

Stop-Payment Order

Answer 20

An order by a drawer of a check to the payer bank not to pay or certify a check

Question 21

Overdraft

Answer 21

The amount of money a drawer owes a bank after it has paid a check despite the drawer’s account having insufficient funds.

Question 22

Wrongful Dishonor

Answer 22

A ituation in which there are sufficient funds in a drawer’s account to pay a properly payable check, but the bank does not do so.

Question 23

Forged Instrument

Answer 23

A check with a forged drawer’s signature on it.

Question 24

Altered Check

Answer 24

A check that has been altered without authorization and thus modifies the legal obligation of a party

Question 25

Original Tenor

Answer 25

The original amount for which the drawer wrote a check.

Question 26

Presentment Warranty

Answer 26

A guarantee in which each prior transferor warrants that a check has not been altered.

Question 27

Payer Bank

Answer 27

The ban where the drawer has a checking account and other which a check is drawn.

Question 28

Depository Bank

Answer 28

The bank where the payee or holder has an account.

Question 29

Collecting Bank

Answer 29

The depository bank and other banks in the collection process (other than the payer bank)

Question 30

Intermediary Bank

Answer 30

A bank in the collection process that is not the depository bank or the payer bank.

Question 31

Electronic Funds Transfer System (EFTS)

Answer 31

Computer and electronic technology that makes to offer electronic payment and collection systems to bank customers. E-bankng and e-money consists of: 1. Automated teller machines. 2. Point-of-sale terminals, 3. Direct deposit and withdrawals, 4. Online Banking, 5. Debit Cards

Question 32

Commercial Wire Transfer

Answer 32

An electronic transfer of funds from one party to another party.