CBT Negotiable Instruments and Check Processing 2

Question 1

When a check is returned due to insufficient funds (NSF), who is typically charged the NSF fee?

Accepted Answer

The account holder who wrote the check

Answer

The NSF fee is charged to the account holder whose account lacked sufficient funds to cover the check they wrote.

Question 2

What is a 'stale-dated' check?

Accepted Answer

A check older than 6 months that a bank may refuse to honor

Answer

Under UCC Article 3, a bank is not obligated to pay a check presented more than six months after its date, as it is considered stale-dated.

Question 3

Which of the following is a MICR line element found at the bottom of a US check?

Accepted Answer

Routing/transit number

Answer

The MICR (Magnetic Ink Character Recognition) line contains the routing/transit number, account number, and check number for automated processing.

Question 4

A teller receives a check made payable to 'John Smith OR Mary Smith.' Who may endorse and cash this check?

Accepted Answer

Either John or Mary Smith alone

Answer

When a check uses 'OR' between payees, either person may endorse and negotiate it independently without the other's signature.

Question 5

What is a 'certified check'?

Accepted Answer

A personal check guaranteed by the bank after verifying and setting aside funds

Answer

A certified check is a personal check that the bank has verified and guaranteed by setting aside the check amount from the customer's account.

CBT - Certified Bank Teller Practice Test