Question 1

Hannah has to repay $4,678 to Ray.She draws a promissory note to that effect.How does executing a promissory note help Hannah in this case? Explain the different parties involved in it.

Accepted Answer

Hannah executes a promissory note as evi...

Question 2

Mike borrows $25,000 from Jill,and executes a promissory note stating that he will repay the money in one year.Mike also requests for a clause that allows him to repay the loan prior to the due date to which Jill agrees.In this scenario,Mike is requesting for a(n) ________ clause.

Accepted Answer

A)   prepayment
B)   acceleration
C)   extension
D)   forestallmentE) B) and D)
F) B) and C)

Question 3

A draft is a two-party instrument that is a conditional written order by one party to pay money to the other party.

Accepted Answer

A) True 
 B)False

Question 4

A ________ is a special form of contract that satisfies the requirements established by Revised Article 3 of the UCC.

Accepted Answer

A)   rental agreement
B)   negotiable instrument
C)   lease agreement
D)   nonnegotiable contractE) All of the above
F) A) and B)

Question 5

Which of the following is a similarity between a bearer paper and an order paper?

Accepted Answer

A)   both require a specific payee to be named
B)   both require indorsements to be considered negotiable
C)   both require delivery to be considered negotiable
D)   both can be claimed by whoever presents the instrument for paymentE) B) and D)
F) A) and C)

Question 6

What is certificate of deposit (CD)? Discuss the different types of CDs and the parties involved in a CD.

Accepted Answer

A certificate of deposit (CD)is a specia...

Question 7

A(n) ________ allows a payee or holder to quicken payment of the principal amount of an instrument,plus accrued interest,upon the occurrence of an event.

Accepted Answer

A)   acceleration clause
B)   prepayment clause
C)   extension clause
D)   forestallment clauseE) A) and B)
F) A) and D)

Question 8

Which of the following is true of an unqualified indorsement?

Accepted Answer

A)   The order and liability of the indorsers is presumed to be the order in which they indorse the instrument, unless otherwise agreed.
B)   The first indorser is presumed to be liable for the full amount in the instrument, unless otherwise specifically agreed.
C)   It guarantees payment of the instrument if the maker defaults.
D)   It protects subsequent indorsees from liability.E) A) and C)
F) None of the above

Question 9

Harry orally promises to pay $7,543 that he owes to Rob.The next day,Rob wants the promise to be written on paper.In this scenario,Rob wants the ________ requirement to be fulfilled in order for the note to be binding.

Accepted Answer

A)   portability
B)   signatory
C)   permanency
D)   transparencyE) None of the above
F) B) and C)

Question 10

Roger,a certified lawyer,borrows money from Jax to start a business.He executes a promissory note stating that he will pay the money back within the next five years.However,Roger also requests for a specific clause to be added that will allow faster repayment of the loan if he inherits any money within the five years.In this scenario,Roger is requesting for a(n) ________ clause.

Accepted Answer

A)   prepayment
B)   acceleration
C)   extension
D)   forestallmentE) None of the above
F) A) and B)

Question 11

A promissory note is a note denying a debt.

Accepted Answer

A) True 
 B)False

Question 12

Bill executes a negotiable instrument that is drawn on Kay Bank,payable to Beth.Which negotiable instrument has Bill executed? Explain the different parties involved in the instrument.

Accepted Answer

Bill has drawn a check.A check is a dist...

Question 13

A(n) ________ is a type of instrument that is payable to anyone in physical possession of the instrument and presents it for payment when it is due.

Accepted Answer

A)   certificate of deposit
B)   order instrument
C)   bearer instrument
D)   checkE) A) and C)
F) B) and C)

Question 14

The signature requirement indicates that a negotiable instrument must be signed by ________.

Accepted Answer

A)   a witness
B)   the maker
C)   a drawee
D)   the payeeE) None of the above
F) A) and D)

Question 15

The transfer of a negotiable instrument by a person other than the issuer is known as ________.

Accepted Answer

A)   negotiation
B)   assignment
C)   indorsement
D)   insuranceE) A) and C)
F) A) and D)

Question 16

A promissory note is an order to pay.

Accepted Answer

A) True 
 B)False

Question 17

Karen has a checking account at First Bank.Karen writes a check to Bonanza Apartments for her rent.Which of the following is true of this situation?

Accepted Answer

A)   Karen is the drawer, First Bank is the drawee, and Bonanza is the payee.
B)   Karen is the drawee, First Banks is the drawer, and Bonanza is the payee.
C)   Karen is the payee, First Bank is the drawee, and Bonanza is the drawer.
D)   Karen is the payee, First Bank is the drawer, and Bonanza is the drawee.E) None of the above
F) A) and D)

Question 18

A promissory note is an unconditional written promise by one party to pay money to another party.

Accepted Answer

A) True 
 B)False

Question 19

A primary function of a negotiable instrument is that it acts as a substitute for ________.

Accepted Answer

A)   money
B)   goods sold
C)   services rendered
D)   the assets held by the drawerE) A) and B)
F) B) and D)

Question 20

Which of the following is true of a promissory note?

Accepted Answer

A)   It is an evidence of repayment of debt.
B)   It is a note denying the credit.
C)   It is an evidence of extension of credit.
D)   It is a note of acknowledgement of debt.E) All of the above
F) B) and C)

Exam 20: Creation and Transfer of Negotiable Instruments

Harry orally promises to pay $7,543 that he owes to Rob.The next day,Rob wants the promise to be written on paper.In this scenario,Rob wants the ________ requirement to be fulfilled in order for the note to be binding.

Correct Answer
verified

A promissory note is an unconditional written promise by one party to pay money to another party.

Correct Answer
verified

A(n) ________ is a type of instrument that is payable to anyone in physical possession of the instrument and presents it for payment when it is due.

Correct Answer
verified

A promissory note is a note denying a debt.

Correct Answer
verified

What is certificate of deposit (CD)? Discuss the different types of CDs and the parties involved in a CD.

Correct Answer
verified
A certificate of deposit (CD)is a specia...
View Answer

A ________ is a special form of contract that satisfies the requirements established by Revised Article 3 of the UCC.

Correct Answer
verified

Correct Answer
verified

A promissory note is an order to pay.

Correct Answer
verified

The transfer of a negotiable instrument by a person other than the issuer is known as ________.

Correct Answer
verified

The signature requirement indicates that a negotiable instrument must be signed by ________.

Correct Answer
verified

Which of the following is true of an unqualified indorsement?

Correct Answer
verified

A(n) ________ allows a payee or holder to quicken payment of the principal amount of an instrument,plus accrued interest,upon the occurrence of an event.

Correct Answer
verified

Karen has a checking account at First Bank.Karen writes a check to Bonanza Apartments for her rent.Which of the following is true of this situation?

Correct Answer
verified

Mike borrows $25,000 from Jill,and executes a promissory note stating that he will repay the money in one year.Mike also requests for a clause that allows him to repay the loan prior to the due date to which Jill agrees.In this scenario,Mike is requesting for a(n) ________ clause.

Correct Answer
verified

Hannah has to repay $4,678 to Ray.She draws a promissory note to that effect.How does executing a promissory note help Hannah in this case? Explain the different parties involved in it.

Correct Answer
verified
Hannah executes a promissory note as evi...
View Answer

Which of the following is true of a promissory note?

Correct Answer
verified

A draft is a two-party instrument that is a conditional written order by one party to pay money to the other party.

Correct Answer
verified

A primary function of a negotiable instrument is that it acts as a substitute for ________.

Correct Answer
verified

Which of the following is a similarity between a bearer paper and an order paper?

Correct Answer
verified

Bill executes a negotiable instrument that is drawn on Kay Bank,payable to Beth.Which negotiable instrument has Bill executed? Explain the different parties involved in the instrument.

Correct Answer
verified
Bill has drawn a check.A check is a dist...
View Answer

Exam 20: Creation and Transfer of Negotiable Instruments

Harry orally promises to pay $7,543 that he owes to Rob.The next day,Rob wants the promise to be written on paper.In this scenario,Rob wants the ________ requirement to be fulfilled in order for the note to be binding.

Correct AnswerverifiedShow Answer

A promissory note is an unconditional written promise by one party to pay money to another party.

Correct AnswerverifiedShow Answer

A(n) ________ is a type of instrument that is payable to anyone in physical possession of the instrument and presents it for payment when it is due.

Correct AnswerverifiedShow Answer

A promissory note is a note denying a debt.

Correct AnswerverifiedShow Answer

What is certificate of deposit (CD)? Discuss the different types of CDs and the parties involved in a CD.

Correct AnswerverifiedA certificate of deposit (CD)is a specia...View AnswerShow Answer

A ________ is a special form of contract that satisfies the requirements established by Revised Article 3 of the UCC.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A promissory note is an order to pay.

Correct AnswerverifiedShow Answer

The transfer of a negotiable instrument by a person other than the issuer is known as ________.

Correct AnswerverifiedShow Answer

The signature requirement indicates that a negotiable instrument must be signed by ________.

Correct AnswerverifiedShow Answer

Which of the following is true of an unqualified indorsement?

Correct AnswerverifiedShow Answer

A(n) ________ allows a payee or holder to quicken payment of the principal amount of an instrument,plus accrued interest,upon the occurrence of an event.

Correct AnswerverifiedShow Answer

Karen has a checking account at First Bank.Karen writes a check to Bonanza Apartments for her rent.Which of the following is true of this situation?

Correct AnswerverifiedShow Answer

Mike borrows $25,000 from Jill,and executes a promissory note stating that he will repay the money in one year.Mike also requests for a clause that allows him to repay the loan prior to the due date to which Jill agrees.In this scenario,Mike is requesting for a(n) ________ clause.

Correct AnswerverifiedShow Answer

Hannah has to repay $4,678 to Ray.She draws a promissory note to that effect.How does executing a promissory note help Hannah in this case? Explain the different parties involved in it.

Correct AnswerverifiedHannah executes a promissory note as evi...View AnswerShow Answer

Which of the following is true of a promissory note?

Correct AnswerverifiedShow Answer

A draft is a two-party instrument that is a conditional written order by one party to pay money to the other party.

Correct AnswerverifiedShow Answer

A primary function of a negotiable instrument is that it acts as a substitute for ________.

Correct AnswerverifiedShow Answer

Which of the following is a similarity between a bearer paper and an order paper?

Correct AnswerverifiedShow Answer

Bill executes a negotiable instrument that is drawn on Kay Bank,payable to Beth.Which negotiable instrument has Bill executed? Explain the different parties involved in the instrument.

Correct AnswerverifiedBill has drawn a check.A check is a dist...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A certificate of deposit (CD)is a specia...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Hannah executes a promissory note as evi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Bill has drawn a check.A check is a dist...
View Answer