Asked by Raney Sumpter on Jul 15, 2024
Verified
Bill submits a time card for a non-existent employee.The employer issues the payroll check.Bill forges the indorsement and negotiates the check to Ted.Which of the following statements is true?
A) The loss from the forged check is borne by the holder in due course.
B) The check cannot be negotiated as it carries the signature of a non-existent person.
C) The employer has the right to refuse payment to Ted.
D) Ted submits the check to the employer and receives the face amount.
Forged Indorsement
This refers to an unauthorized signature on a negotiable instrument, such as a check, that falsely purports to be that of the named endorsee.
Non-Existent Employee
A fabricated or fictitious employee created on company records, usually for fraudulent purposes like embezzlement.
Borne
Carried or transported by; often used in the context of who is responsible for paying for something, e.g., "costs borne by the company."
- Grasp the repercussions associated with changing or counterfeiting negotiable instruments and the defenses accessible to legitimate holders in due course.
Verified Answer
PY
Princess YvonneJul 17, 2024
Final Answer :
D
Explanation :
The Code allows any indorsement in the name of the fictitious payee to be effective as the payee's indorsement in favor of any person that pays the instrument in good faith or takes it for value or for collection.
Learning Objectives
- Grasp the repercussions associated with changing or counterfeiting negotiable instruments and the defenses accessible to legitimate holders in due course.