Appendix E for Unit Five
Questions on the Features
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
CHAPTER 24—SHIFTING LEGAL PRIORITIES FOR BUSINESS:
PERSON-TO-PERSON MOBILE PAYMENTS AID IN SUSTAINABILITY
B1. When possible, Sunee pays recurring monthly bills through automatic bank transfers
and person-to-person payments to e-mail addresses or cell phone numbers.
Compared to the use of paper checks, Sunee’s payment methods
a. aid sustainability.
b. hurt sustainability.
c. will never affect sustainability.
d. are poised to take a step toward sustainability.
CHAPTER 27—INSIGHT INTO ETHICS:
EXPEDITED FUNDS AND INCREASING CHECK FRAUD
B2. Orville sends Percy a certified check for $5,000. Percy deposits the check into his
account at Quantum Bank. The next business day, the bank confirms a $5,000 increase
in Percy’s account. He then wires Orville $500 for “fees.” Later, the bank discovers
that the check is counterfeit. On these facts, the bank can deduct from Percy’s
account
a. $5,500.
b. $5,000.
c. $500.
d. 0.
UNIT FIVE—FOCUS ON ETHICS:
NEGOTIABLE INSTRUMENTS
B3. State Bank’s policy requires that indorsements on checks exactly match the names of
the payees. Tovar, an employee of United Company, issues and indorses several
payroll checks in the names of former employees and deposits them into her account
at State. United files a suit against State to recover the funds. Most likely to suffer the
loss is
a. State Bank on the basis of bad faith.
b. Tovar on the ground that she was a fictitious payee.
c. United Company for failing to monitor its employee.
d. the employees in whose names the checks were issued and indorsed.
B4. Huey signs a promissory note in reliance on Ian’s assurance that it is not a note. Ian
negotiates the note to Jinx Collection Agency, which is a holder in due course (HDC) of
the note. When Jinx tries to collect, Huey refuses to pay. Under the HDC doctrine, the
loss falls on
a. Huey only.
b. Huey and Jinx equally.
c. Huey or Jinx, depending on which party can afford the loss.
d. Jinx only.