Asked by DIVYNE PERRIN on Jun 15, 2024
Verified
Dan drew a $100 check on ABC Bank payable "to the order of Peg Buncy." Peg cashed the check at National Bank. National Bank is an agent of Peg until the drawee bank pays the check.
Drawee Bank
A bank upon which a check or draft is drawn and is responsible for paying the amount to the individual or entity presenting it for payment.
Agent
A person authorized to act on behalf of another, known as the principal, in business transactions or other matters.
- Understand the guarantees and responsibilities of banks involved in the collection during the transfer of commercial instruments.
Verified Answer
FF
faker fakercdeJun 16, 2024
Final Answer :
True
Explanation :
National Bank acts as Peg's agent in the collection process until the drawee bank (ABC Bank) pays the check, at which point the agency relationship ends and the transaction is completed.
Learning Objectives
- Understand the guarantees and responsibilities of banks involved in the collection during the transfer of commercial instruments.