National Check Professional (NCP) Certification Practice Test

What does the UCC "Transfer" warranty guarantee regarding signatures on a check?

1. All signatures are legible

2. All signatures on the item are authentic and authorized

3. Only the drawer's signature is required

4. At least one signature must be authorized

The correct answer is: All signatures on the item are authentic and authorized

The UCC "Transfer" warranty concerning signatures on a check ultimately guarantees that all signatures on the item are authentic and authorized. This warranty is part of the Uniform Commercial Code, which governs commercial transactions, including the transfer of negotiable instruments like checks. When an individual or entity transfers a check, they affirm this warranty, assuring the receiving party that no signatures are forged or altered. This is crucial because it provides a level of security and trust in the transaction, ensuring that the party receiving the check can rely on the validity of the signatures. Other options do not align with the scope of the UCC warranty. While legibility of signatures is important for practical reasons, it is not a component of the transfer warranty. The requirement for only the drawer's signature or at least one authorized signature does not encompass the broader guarantee that all signatures present are correct and authorized according to the terms of the UCC.