Abe draws a check for 100 on his checking account at first


Abe draws a check for $100 on his checking account at First Bank payable to the order of Bill. Bill cleverly raises the check to $1000, indorses it, and negotiats it to Chen, Chen then presents the check for payment to First Bank, which oays her $1,000 and charges Abe's account for $1,000. Abe then asks the bank to re credit his account for the altered check, and it does so. Based on this scenario, which of the following is FALSE

A) First Bank carries the risk of loss and is liable

B) First Bank can recover from Chen because she warranted that the instrument had not been altered

C) After Chen pays First Bank, she can recover against Bill

D) Unless he was negligent in drawing the check, Abe's liability is limited to $100

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Financial Accounting: Abe draws a check for 100 on his checking account at first
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