Business Law (Chapters 22 & 23)

Question 1 5 / 5 pts All of the following..

Business Law (Chapters 22 & 23)

Question 1

5 / 5 pts
All of the following are essential to negotiable commercial paper EXCEPT the fact that it must be:

on forms provided by a bank.

payable on demand or at a definite time.

in writing and signed by the maker or drawer.

payable to order, to bearer, or to cash.

Question 2

5 / 5 pts
A person may not postdate a check for self-protection when some act is to be completed by the payee before the date of the check.

True

False

Question 3

5 / 5 pts
An Automated Teller Machine performs many of the functions of a bank as would a

cashier.

teller.

attorney.

manager.

Question 4

5 / 5 pts
An endorsement to which words have been added that limit the further endorsement of the instrument, such as “for deposit only,” is a:

special endorsement.

blank endorsement.

restrictive endorsement.

qualified endorsement.

Question 5

5 / 5 pts
The promise in a note, or the order in a check or draft, must be conditional.

True

False

Question 6

5 / 5 pts
Under the Uniform Commercial Code, a distinction is made between lack of delivery of a completed instrument and lack of delivery of an incomplete instrument.

True

False

Question 7

5 / 5 pts
The holder of dishonored commercial paper must give notice of the dishonor immediately to the drawer and to all endorsers in order to hold them liable on the instrument.

True

False

Question 8

5 / 5 pts
If a completed negotiable instrument comes into the possession of an immediate party (the payee indicated on the instrument) before the maker or drawer has delivered it, then the:

payee can collect on the instrument.

payer only can collect on the instrument.

payee cannot collect on the instrument.

drawer only can collect on the instrument.

Question 9

5 / 5 pts

A system which allows a consumer to transfer funds from a bank account to the merchant’s bank account to pay for merchandise purchased is known as a:

pay-by-phone system.

point-of-sale system.

point-of-credit system.

buying facilitation system.

Question 10

5 / 5 pts
Commercial paper must be presented for payment during business hours on the due date given on the instrument.

True

False

Question 11

5 / 5 pts
Checks are sometimes payable on demand.

True

False

Question 12

5 / 5 pts
The maker of a note or the drawer of a check or draft may deduct from the amount demanded by an immediate party any amounts owed to him or her by the payee. This type of personal defense is called a:

counterclaim.

declarative claim.

simple claim.

commercial claim.

Question 13

5 / 5 pts
The UCC requires presentment of commercial paper to be made in person.

True

False

Question 14

5 / 5 pts
When the holder of commercial paper signs his or her name, with or without other words, on the back of the instrument, this writing is referred to as a(n):

endorsement.

acknowledgment.

acceptance.

receipt.

Question 15

5 / 5 pts
An instrument with an unconditional written promise to pay, or pay to the order of another party, a certain sum of money on demand or at a definite time is known as a:

stop-payment order.

negotiable instrument.

garnishee order.

restraining order.

Question 16

Not yet graded / 5 pts
State the differences between commercial paper and an ordinary contract.
Your Answer:

The main difference in the commercial paper and ordinary paper is presumption of consideration and assignability. An ordinary paper must have proof of consideration. A commercial paper can be transferred to some person but ordinary contract cannot.

Question 17

5 / 5 pts
Often state statutes expressly declare that commercial paper given for gambling transactions or at usurious rates of interest are:

voidable

void.

valid.

legal.

Question 18

5 / 5 pts
In order to ensure negotiability, the Uniform Commercial Code assumes that the endorser is the true owner of the paper. If he or she found or stole the paper and transferred it to another by endorsement, the:

endorser is liable up to $500 for the loss suffered by the endorsee.

endorsee cannot seek any remedy from the endorser.

endorser is liable for any loss suffered by the endorsee.

law provides a jail term to the endorser, but not compensation to endorsee.

Question 19

5 / 5 pts
A person cannot be held liable, even by a holder in due course, if he or she signs an instrument that is apparently not negotiable and the paper is later fraudulently converted into a(n):

negotiable instrument.

specialty contract.

arbitration agreement.

statutory contract.

Question 20

5 / 5 pts
When an endorsement is made on the instrument, it can be further negotiated only when it has been indorsed by the specified person. Such an endorsement is a:

special endorsement.

specific endorsement.

definite endorsement.

declarative endorsement.

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