Chapter 25 Questions

Chapter 25 Questions - Chapter 25 Questions 1. What is the...

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Chapter 25 Questions 1. What is the purpose of negotiable instruments? A negotiable instrument is a written document that is signed by the maker or drawer and that contains an unconditional promise or to order to pay a fixed amount of money on demand or at a definite time to the bearer or to order. 2. What are the two kinds of negotiable instruments that contain a promise to pay money? A note is a written promise that by one party, called the maker, to pay money to the order of another party, called the payee. A demand note, as it implies, is payable whenever the payee demands payment. Installment-note is where the principle together with interest on the unpaid balance is payable in installments at specified times. A certificate of deposit is an instrument containing an acknowledgement that a bank has received a sum of money and a promise by the bank to repay the sum of money. 3. What are the two kinds of negotiable instruments that contain an order to pay money? Drafts are an instrument in which one party writes an instrument ordering a second party
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Chapter 25 Questions - Chapter 25 Questions 1. What is the...

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