Sarah Has a Checking Account at First Bank

question 25

Multiple Choice

Sarah has a checking account at First Bank. Orrin steals one of her blank checks, writes a check for $250, and then forges Sarah's signature. He then presents the check to First Bank for payment. First Bank pays the forged instrument. Which of the following statements is correct?

• A) First Bank will have to recredit the $250 to Sarah's account if she so requests, if Sarah was not found to be negligent.
• B) Orrin is responsible to First Bank for the $250.
• C) Sarah is primarily liable if she was negligent in allowing Orrin to take the blank check.
• D) All of these.

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Definitions:

Benefit

An advantage or profit gained from something.

Passive Activity

An activity in which the person involved does not actively participate or exert control, often used in reference to certain types of income for tax purposes.

Sensing

A process of receiving and responding to stimuli or input from the environment, often involving the detection of physical changes.

Nonverbal Cues

Forms of communication without words, such as facial expressions, gestures, and body language.