CHAPTER 26

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1. An operation of account agreement does not normally include terms dealing with

the bank's ability to apply service charges to the customer's accounts
arrangements concerning the production of cheques
arrangements concerning the issuance of cheques
confirmations and stop payments
release of information about the customer by the bank

2. When the bank acts as financial advisor to the account holder, the relationship is

a debtor-creditor relationship
regulated by the Bills of Exchange Act
a fiduciary relationship
a trustee-beneficiary relationship
limited to the terms of the account agreement

3. The holder of a cheque is

the person who creates the cheque by drawing it
the person to whom the cheque is issued as payee
the person who is entitled to payment according to the terms of the underlying contract between the drawer and the payee
the person who presents the cheque to the bank for payment
the person at the bank who enters payment of the cheque by deducting the funds from the account it is drawn on

4. "Certification" is

the process of transferring negotiable instruments from one person to another
the process of signing a negotiable instrument to enable negotiation
the process whereby a bank guarantees payment of a cheque
the process whereby the issuer of a cheque orders the bank not to pay the holder who presents it for payment
a court order that takes a negotiable instrument out of circulation and terminates all rights and obligations associated with it

5. Legislation introduced in 1999 to combat money laundering imposes a mandatory reporting requirement regarding suspicious transactions that result in a conspicuous increase in an account balance. This requirement is imposed on

banks
trust companies
insurance companies
professionals
all of the above

6. It is impossible to stop payment of a cheque once it has been

drawn
countermanded
certified
presented for payment
endorsed

7. A payment made by electronic transfer is

a cheque
a promissory note
a bill of exchange
a bill of sale
none of the above

8. If a cheque has been received in settlement of an obligation owed under a contract and the cheque is returned "n.s.f." by the bank, the payee can

present the cheque again for payment, since the account may have sufficient funds later
take legal action to enforce the contract
take legal action against later endorsers
take legal action against the bank
all of the above

9. In the absence of a provision in the account agreement that allows the account holder a maximum time (after receiving its monthly bank statement) within which to report discrepancies between cheques written and cheques honoured,

the bank is not liable for honouring cheques that it should not have honoured
the bank is liable indefinitely for all cheques that it has honoured but should not have honoured
the bank is obligated to inquire from the account holder about the correctness of the account holder's bank statement
all of the above
none of the above

10. Regarding cheques and other negotiable instruments, words written out in longhand on the back of the document reading "Pay to my son John. Signed Jill Moore" are an example of

special endorsement
restrictive endorsement
endorsement in blank
reduction endorsement
identification endorsement