O'Shea Issues a Check Drawn on Prime Bank to Quality

question 72

Multiple Choice

O'Shea issues a check drawn on Prime Bank to Quality Equipment Supply to pay for a backhoe. Later,O'Shea discovers a defect in the backhoe and orders the bank to stop payment on the check. O'Shea does not renew the order,and the bank clears the check eight months later. The bank

• A)must recredit O'Shea's account.
• B)must obtain funds from Quality to cover the amount of the check.
• C)must substitute acceptable goods.
• D)need not recredit O'Shea's account.

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Definitions:

Escheats

The process by which unclaimed or abandoned property reverts back to the state.

Surviving Relatives

Family members who remain alive after an individual has passed away, often considered in legal contexts for inheritance or benefits.

Executor

The individual appointed to administer the estate of a deceased person in accordance with their will.

Testamentary Trust

A legal mechanism specified in a will that comes into effect upon the death of the individual, and dictates how their assets are allocated.