Question 1

On a cashier's check,the drawer is also the drawee.

Accepted Answer

A) True 
 B)False

Question 2

A certificate of deposit represents a loan by its owner to a bank.

Accepted Answer

A) True 
 B)False

Question 3

An order stating "please pay" is too courteous to create a negotia?ble instrument.

Accepted Answer

A) True 
 B)False

Question 4

A trade name can serve as a valid signature.

Accepted Answer

A) True 
 B)False

Question 5

An instrument that is "payable on presentment" is payable on demand.

Accepted Answer

A) True 
 B)False

Question 6

A signature on a negotiable instrument must be made manually.

Accepted Answer

A) True 
 B)False

Question 7

Gladys,the chief executive officer of Home Electrical,Inc. ,signs an in?strument by using a rubber stamp with her thumbprint on it.This instru?ment is

Accepted Answer

A)  negotiable.
B)  nonnegotiable,because a rubber stamp does not identify the signer.
C)  nonnegotiable,because a thumbprint implies a lack of serious intent.
D)  nonnegotiable,because a thumbprint is not a signature.E) C) and D)
F) B) and C)

Question 8

Wilbur signs a note that includes a clause under which the note's holder can delay the date of its payment indefinitely.This is

Accepted Answer

A)  an acceleration clause.
B)  an extension clause.
C)  an immaturity clause.
D)  a stop-payment clause.E) B) and C)
F) C) and D)

Question 9

Rupert owes $5,000 in unpaid taxes.Using the back of an old t-shirt,he exe?cutes an instrument for $5,000 that otherwise meets the re?quire?ments for negotiability.This instrument is most likely

Accepted Answer

A)  negotiable.
B)  nonnegotiable,because an instrument must be on paper.
C)  nonnegotiable,because a t-shirt is not sufficiently permanent.
D)  nonnegotiable,because the government does not appreciate it.E) All of the above
F) A) and B)

Question 10

A negotiable instrument can function as an extension of credit.

Accepted Answer

A) True 
 B)False

Question 11

Tyrone draws a check payable to "Cash" and presents it to Urban Bank for payment.This instrument is

Accepted Answer

A)  a bearer instrument.
B)  an order instrument.
C)  valid but nonnegotiable.
D)  void.E) B) and D)
F) C) and D)

Question 12

Daria signs an instrument payable to the order of Employees Credit Union "on or before" June 15.This instrument is

Accepted Answer

A)  negotiable.
B)  nonnegotiable,because the maker can move up the payment date.
C)  nonnegotiable,because moving up the payment date is optional.
D)  nonnegotiable,because the exact payment date cannot be deter?mined from the face of the instrument.E) All of the above
F) A) and B)

Question 13

International Properties,Inc.(IPI) ,signs an instrument in favor of Financial Investments Corporation that includes the statement "IPI plans to pay this debt from the proceeds of the sale of the IPI Office Building in Montreal." This instrument is

Accepted Answer

A)  negotiable.
B)  nonnegotiable,because banks cannot easily process office buildings.
C)  nonnegotiable,because it refers to a separate sale.
D)  nonnegotiable,because Montreal is in Canada,not the United States.E) A) and C)
F) B) and D)

Question 14

Fact Pattern 24-1B 
Dominion Sales Ltd.in Canada and Eagle Buying Company in the United States enter a contract for a sale of forestry products.Dominion draws a draft unconditionally ordering Great Federal Bank,Eagle's bank,to pay $60,000 to Dominion's order in sixty days.Eagle signs and dates the draft.
-Refer to Fact Pattern 24-1B.This instrument is

Accepted Answer

A)  a banker's acceptance.
B)  a nonnegotiable instrument.
C)  a promissory note.
D)  a trade acceptance.E) B) and C)
F) None of the above

Question 15

To be negotiable,an instrument cannot be portable.

Accepted Answer

A) True 
 B)False

Question 16

A trade acceptance is a promissory note.

Accepted Answer

A) True 
 B)False

Question 17

On the back of an envelope,Phoebe writes,"I promise to pay Quint or bearer $600 on de?mand.[Signed] Phoebe." What type of instrument is this? Is it nego?tiable? If not,why not?

Accepted Answer

This instrument is a promissory note and...

Question 18

An instrument that promises to pay "in goods" can be negotiable.

Accepted Answer

A) True 
 B)False

Question 19

Fact Pattern 24-1B 
Dominion Sales Ltd.in Canada and Eagle Buying Company in the United States enter a contract for a sale of forestry products.Dominion draws a draft unconditionally ordering Great Federal Bank,Eagle's bank,to pay $60,000 to Dominion's order in sixty days.Eagle signs and dates the draft.
-Refer to Fact Pattern 24-1B.With respect to this instrument,Dominion is

Accepted Answer

A)  the banker.
B)  the maker.
C)  the payee.
D)  the trader.E) All of the above
F) A) and D)

Question 20

Will signs a check payable to "cash" and gives it to Yves.This check is

Accepted Answer

A)  negotiable.
B)  nonnegotiable,because it does not indicate a specific payee.
C)  nonnegotiable,because it is not signed by the payee.
D)  nonnegotiable,because "Yves" is not "cash."E) A) and D)
F) None of the above

Exam 24: A: The Function Creation of Negotiable Instruments

Rupert owes $5,000 in unpaid taxes.Using the back of an old t-shirt,he exe?cutes an instrument for $5,000 that otherwise meets the re?quire?ments for negotiability.This instrument is most likely

Correct Answer
verified

An order stating "please pay" is too courteous to create a negotia?ble instrument.

Correct Answer
verified

An instrument that promises to pay "in goods" can be negotiable.

Correct Answer
verified

International Properties,Inc.(IPI) ,signs an instrument in favor of Financial Investments Corporation that includes the statement "IPI plans to pay this debt from the proceeds of the sale of the IPI Office Building in Montreal." This instrument is

Correct Answer
verified

Tyrone draws a check payable to "Cash" and presents it to Urban Bank for payment.This instrument is

Correct Answer
verified

Will signs a check payable to "cash" and gives it to Yves.This check is

Correct Answer
verified

An instrument that is "payable on presentment" is payable on demand.

Correct Answer
verified

Daria signs an instrument payable to the order of Employees Credit Union "on or before" June 15.This instrument is

Correct Answer
verified

Correct Answer
verified

On the back of an envelope,Phoebe writes,"I promise to pay Quint or bearer $600 on de?mand.[Signed] Phoebe." What type of instrument is this? Is it nego?tiable? If not,why not?

Correct Answer
verified
This instrument is a promissory note and...
View Answer

A trade name can serve as a valid signature.

Correct Answer
verified

A negotiable instrument can function as an extension of credit.

Correct Answer
verified

On a cashier's check,the drawer is also the drawee.

Correct Answer
verified

A trade acceptance is a promissory note.

Correct Answer
verified

A signature on a negotiable instrument must be made manually.

Correct Answer
verified

Wilbur signs a note that includes a clause under which the note's holder can delay the date of its payment indefinitely.This is

Correct Answer
verified

A certificate of deposit represents a loan by its owner to a bank.

Correct Answer
verified

Correct Answer
verified

To be negotiable,an instrument cannot be portable.

Correct Answer
verified

Gladys,the chief executive officer of Home Electrical,Inc. ,signs an in?strument by using a rubber stamp with her thumbprint on it.This instru?ment is

Correct Answer
verified

Exam 24: A: The Function Creation of Negotiable Instruments

Rupert owes $5,000 in unpaid taxes.Using the back of an old t-shirt,he exe?cutes an instrument for $5,000 that otherwise meets the re?quire?ments for negotiability.This instrument is most likely

Correct AnswerverifiedShow Answer

An order stating "please pay" is too courteous to create a negotia?ble instrument.

Correct AnswerverifiedShow Answer

An instrument that promises to pay "in goods" can be negotiable.

Correct AnswerverifiedShow Answer

International Properties,Inc.(IPI) ,signs an instrument in favor of Financial Investments Corporation that includes the statement "IPI plans to pay this debt from the proceeds of the sale of the IPI Office Building in Montreal." This instrument is

Correct AnswerverifiedShow Answer

Tyrone draws a check payable to "Cash" and presents it to Urban Bank for payment.This instrument is

Correct AnswerverifiedShow Answer

Will signs a check payable to "cash" and gives it to Yves.This check is

Correct AnswerverifiedShow Answer

An instrument that is "payable on presentment" is payable on demand.

Correct AnswerverifiedShow Answer

Daria signs an instrument payable to the order of Employees Credit Union "on or before" June 15.This instrument is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

On the back of an envelope,Phoebe writes,"I promise to pay Quint or bearer $600 on de?mand.[Signed] Phoebe." What type of instrument is this? Is it nego?tiable? If not,why not?

Correct AnswerverifiedThis instrument is a promissory note and...View AnswerShow Answer

A trade name can serve as a valid signature.

Correct AnswerverifiedShow Answer

A negotiable instrument can function as an extension of credit.

Correct AnswerverifiedShow Answer

On a cashier's check,the drawer is also the drawee.

Correct AnswerverifiedShow Answer

A trade acceptance is a promissory note.

Correct AnswerverifiedShow Answer

A signature on a negotiable instrument must be made manually.

Correct AnswerverifiedShow Answer

Wilbur signs a note that includes a clause under which the note's holder can delay the date of its payment indefinitely.This is

Correct AnswerverifiedShow Answer

A certificate of deposit represents a loan by its owner to a bank.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

To be negotiable,an instrument cannot be portable.

Correct AnswerverifiedShow Answer

Gladys,the chief executive officer of Home Electrical,Inc. ,signs an in?strument by using a rubber stamp with her thumbprint on it.This instru?ment is

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
This instrument is a promissory note and...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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