Zachary, Who Has Been Authorized to Write a Check from a Company

question 84

Multiple Choice

Zachary, who has been authorized to write a check from a company account to pay employees, draws bonus checks from the company account for five imaginary employees; endorses the checks in their names; and deposits those into his own bank account. Which of the following is true regarding whether the company will be required to take the loss on the checks?

• A) Under the fictitious payee rule, the company will be required to take the loss on the checks unless the company can obtain the funds from Zachary.
• B) Under the imposter rule, the company will be required to take the loss on the checks unless the company can obtain the funds from Zachary.
• C) Under the transferor rule, the company will be required to take the loss on the checks unless the company can obtain the funds from Zachary.
• D) Under the employee-liability rule, the company will be able to recover from any bank that cashed the check in addition to Zachary.
• E) Under the banking liability act, the company will be able to recover from any bank that cashed the check in addition to Zachary.

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Definitions:

Rape

A crime involving the unlawful sexual assault or any sexual intercourse without the consent of the victim.

Factors

Variables or elements that contribute to producing a result or influence the outcome of a process or situation.

Substance Use

The consumption of drugs, alcohol, or other chemicals, which can range from casual use to substance abuse and dependence.

Early Adulthood

A developmental stage ranging approximately from the late teens or early twenties to the thirties, marking the transition from adolescence to full-fledged adulthood.