Question 1

Which of the following is a draft with respect to which the drawer and drawee are the same bank or branches of the same bank?

Accepted Answer

A)   Cashier's check
B)   Traveler's check
C)   Certified check
D)   Cashier's checks, traveler's checks, and certified checks
E)   A cashier's check and a traveler's check, but not a certified checkF) A) and C)
G) A) and B)

Question 2

A negotiable instrument must be a conditional order to pay.

Accepted Answer

A) True 
 B)False  False

Question 3

___________ is a person receiving an endorsement.

Accepted Answer

A)   Allonge
B)   A transferor
C)   A transferee
D)   An endorser
E)   An endorseeF) B) and D)
G) B) and E)

Question 4

Which of the following is false regarding requirements for an instrument to be negotiable?

Accepted Answer

A)   The instrument must be a written document.
B)   The instrument must be signed by the creator of the instrument at the end of the instrument.
C)   The instrument must have an unconditional promise or order to pay.
D)   The amount to be paid in the instrument must be a sum certain in money.
E)   All of these are false.F) B) and D)
G) All of the above

Question 5

Generally, assuming no negligence on the part of the victim, when an endorsement on a check has been forged and properly reported to the bank, which party is the party ultimately liable for the loss?

Accepted Answer

A)   The drawer.
B)   The first party to accept the forged instrument.
C)   The first legitimate endorser of the instrument.
D)   The bank of the first party to accept the forged instrument.
E)   The bank of the drawer even if proper notice was given of the forgery.F) A) and E)
G) D) and E)

Question 6

The UCC prohibits bank customers from postdating checks.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following was the result on appeal in New Wave Technologies, Inc. v. Legacy Bank of Texas, the case in the text involving whether endorsements of both payees were required in order for the bank involved to properly release funds on a check made out to "Maxim Solutions Group/New Wave Techn" and providing on the back that "Each Payee Must Endorse Exactly As Drawn"?

Accepted Answer

A)   That under the UCC the slash meant "and" resulting in the endorsements of both payees being required before the bank could properly release funds on the check.
B)   That the slash was ambiguous and would, therefore, be interpreted to mean "and" resulting in the endorsements of both payees being required before the bank could properly release funds on the check.
C)   That the slash was ambiguous and would, therefore, be interpreted to mean "or" resulting in the endorsement of only one payee being required before the bank could properly release funds on the check.
D)   That the slash was ambiguous resulting in the check being non-negotiable regardless of how many signatures were on it.
E)   That while the check would normally be interpreted to require only one payee, the statement on the back that "Each Payee Must Endorse Exactly As Drawn" resulted in the signature of both payees being required before the bank could properly release funds.F) All of the above
G) B) and C)

Question 8

With a[n] ______________ instrument, the payee or subsequent holder can demand actual payment at any time.

Accepted Answer

A)   Time
B)   Demand
C)   Recourse
D)   Nonrecourse
E)   ImmediateF) A) and E)
G) D) and E)

Question 9

Order paper must be delivered but not endorsed in order to be negotiated.

Accepted Answer

A) True 
 B)False  False

Question 10

Which of the following is a promise made by a bank to pay a payee a certain amount of money at a future time?

Accepted Answer

A)   A note
B)   A draft
C)   A novation
D)   A check
E)   A certificate of depositF) A) and C)
G) All of the above

Question 11

Which of the following is the party who possesses a negotiable instrument payable to the party or to the bearer of the instrument?

Accepted Answer

A)   A holder.
B)   A deliverer.
C)   A transferor.
D)   An acknowledger.
E)   An orderee.F) A) and B)
G) A) and C)

Question 12

Negotiable instruments payable to whoever possesses them are known as _______________ instruments.

Accepted Answer

A)   Demand
B)   Order
C)   Transactional
D)   Bearer
E)   PayorF) A) and C)
G) None of the above

Question 13

A note is a promise, by the maker of the note, to pay a payee.

Accepted Answer

A) True 
 B)False

Question 14

Susie Smith signed a note agreeing to pay, "Annie Greene, Mary Hodge," $1,000. The payment was for painting her house. An issue with the note was that it spelled Annie's last name, "Greene," whereas Annie spells it simply, "Green." Annie and Mary had a disagreement regarding how to split up the funds for painting the house. Annie proceeded to sign the note on the back, "Annie Green," and presented it to Bill Brown to satisfy a debt that she owed him. Bill Brown endorsed the note on the back and took it to the bank for payment. Mary is unhappy because she did not obtain any of the funds and stated that Annie could not legally endorse the instrument because it misspelled her name and also because Mary did sign it. Which of the following is true regarding Mary's claim that the endorsement by Annie was illegal because the note misspelled Annie's name?

Accepted Answer

A)   Mary is correct.
B)   Mary is correct, but only because Annie signed the note, "Green," instead of "Greene," as such was on the note.
C)   Mary is correct, but only because two payees are listed.
D)   Mary is incorrect.
E)   Mary is incorrect unless she can prove that Susie intentionally and purposefully spelled the name wrong to prevent negotiation.F) B) and D)
G) A) and B)

Question 15

The customer cannot order a stop payment on an electronic fund transfer.

Accepted Answer

A) True 
 B)False

Question 16

In the event of a misspelled name, how may the holder endorse the document?

Accepted Answer

A)   Only with the misspelled name.
B)   Only with the holder's actual name.
C)   With the holder's actual name or with the misspelled name.
D)   Endorsement is impossible in such a situation.
E)   With the misspelled name and also with a statement indicating to any later holder what the correct spelling should have been.F) A) and D)
G) A) and E)

Question 17

Anne orally promises Judy that in return for Judy washing Anne's dog, Anne unconditionally promises to pay Judy $50 the next Wednesday. Is a contract formed, is it negotiable, and why or why not?

Accepted Answer

It appears that a contract is formed bec...

Question 18

Set forth the six requirements for an instrument to be negotiable.

Accepted Answer

The six requirements for an instrument t...

Question 19

A ______ is a specific draft, drawn by the owner of a checking account, ordering the bank to pay the payee from that drawer's account.

Accepted Answer

A)   Promissory contract
B)   Certificates of deposit
C)   Note
D)   Check
E)   Time instrumentF) A) and D)
G) A) and B) D

Question 20

A bank involved in the check collection process may only be classified as one type of bank during the entire process.

Accepted Answer

A) True 
 B)False

Exam 16: Sales and Lease Contracts: Performance, Warranties, and Remedies

Which of the following is a draft with respect to which the drawer and drawee are the same bank or branches of the same bank?

Correct Answer
verified

A negotiable instrument must be a conditional order to pay.

Correct Answer
verified
False

___________ is a person receiving an endorsement.

Correct Answer
verified

Which of the following is false regarding requirements for an instrument to be negotiable?

Correct Answer
verified

Generally, assuming no negligence on the part of the victim, when an endorsement on a check has been forged and properly reported to the bank, which party is the party ultimately liable for the loss?

Correct Answer
verified

The UCC prohibits bank customers from postdating checks.

Correct Answer
verified

Correct Answer
verified

With a[n] ______________ instrument, the payee or subsequent holder can demand actual payment at any time.

Correct Answer
verified

Order paper must be delivered but not endorsed in order to be negotiated.

Correct Answer
verified
False

Which of the following is a promise made by a bank to pay a payee a certain amount of money at a future time?

Correct Answer
verified

Which of the following is the party who possesses a negotiable instrument payable to the party or to the bearer of the instrument?

Correct Answer
verified

Negotiable instruments payable to whoever possesses them are known as _______________ instruments.

Correct Answer
verified

A note is a promise, by the maker of the note, to pay a payee.

Correct Answer
verified

Correct Answer
verified

The customer cannot order a stop payment on an electronic fund transfer.

Correct Answer
verified

In the event of a misspelled name, how may the holder endorse the document?

Correct Answer
verified

Anne orally promises Judy that in return for Judy washing Anne's dog, Anne unconditionally promises to pay Judy $50 the next Wednesday. Is a contract formed, is it negotiable, and why or why not?

Correct Answer
verified
It appears that a contract is formed bec...
View Answer

Set forth the six requirements for an instrument to be negotiable.

Correct Answer
verified
The six requirements for an instrument t...
View Answer

A ______ is a specific draft, drawn by the owner of a checking account, ordering the bank to pay the payee from that drawer's account.

Correct Answer
verified
D

A bank involved in the check collection process may only be classified as one type of bank during the entire process.

Correct Answer
verified

Exam 16: Sales and Lease Contracts: Performance, Warranties, and Remedies

Which of the following is a draft with respect to which the drawer and drawee are the same bank or branches of the same bank?

Correct AnswerverifiedShow Answer

A negotiable instrument must be a conditional order to pay.

Correct AnswerverifiedFalse

___________ is a person receiving an endorsement.

Correct AnswerverifiedShow Answer

Which of the following is false regarding requirements for an instrument to be negotiable?

Correct AnswerverifiedShow Answer

Generally, assuming no negligence on the part of the victim, when an endorsement on a check has been forged and properly reported to the bank, which party is the party ultimately liable for the loss?

Correct AnswerverifiedShow Answer

The UCC prohibits bank customers from postdating checks.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

With a[n] ______________ instrument, the payee or subsequent holder can demand actual payment at any time.

Correct AnswerverifiedShow Answer

Order paper must be delivered but not endorsed in order to be negotiated.

Correct AnswerverifiedFalse

Which of the following is a promise made by a bank to pay a payee a certain amount of money at a future time?

Correct AnswerverifiedShow Answer

Which of the following is the party who possesses a negotiable instrument payable to the party or to the bearer of the instrument?

Correct AnswerverifiedShow Answer

Negotiable instruments payable to whoever possesses them are known as _______________ instruments.

Correct AnswerverifiedShow Answer

A note is a promise, by the maker of the note, to pay a payee.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The customer cannot order a stop payment on an electronic fund transfer.

Correct AnswerverifiedShow Answer

In the event of a misspelled name, how may the holder endorse the document?

Correct AnswerverifiedShow Answer

Anne orally promises Judy that in return for Judy washing Anne's dog, Anne unconditionally promises to pay Judy $50 the next Wednesday. Is a contract formed, is it negotiable, and why or why not?

Correct AnswerverifiedIt appears that a contract is formed bec...View AnswerShow Answer

Set forth the six requirements for an instrument to be negotiable.

Correct AnswerverifiedThe six requirements for an instrument t...View AnswerShow Answer

A ______ is a specific draft, drawn by the owner of a checking account, ordering the bank to pay the payee from that drawer's account.

Correct AnswerverifiedD

A bank involved in the check collection process may only be classified as one type of bank during the entire process.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
False

Correct Answer
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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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False

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
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
It appears that a contract is formed bec...
View Answer

Correct Answer
verified
The six requirements for an instrument t...
View Answer

Correct Answer
verified
D

Correct Answer
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