Ch24-TB1-WBL-10e

Ch24-TB1-WBL-10e - Chapter24 N.B:,modified,orunchanged,as follows N =

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Chapter 24 The Function and Creation of  Negotiable Instruments N.B.:   TYPE  indicates that a question is new, modified, or unchanged, as  follows. N A question  new  to this edition of the Test Bank. + A question  modified  from the previous edition of the Test Bank, = A question  included  in the previous edition of the Test Bank. TRUE/FALSE QUESTIONS 1. A negotiable instrument serves as a substitute for cash. ANSWER: T PAGE: 478 TYPE: + 2. On a trade acceptance, the drawee is also the payee. ANSWER: F PAGE: 480 TYPE: = 3. A check is a draft. ANSWER: T PAGE: 481 TYPE: = 239
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240 TEST BANK 1—UNIT FIVE: NEGOTIABLE INSTRUMENTS 4. A promissory note cannot be a negotiable instrument. ANSWER: F PAGE: 483 TYPE: = 5. CDs generally acknowledge the holder’s deposit and only implicitly suggest  a promise to repay. ANSWER: F PAGE: 483 TYPE: =
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CHAPTER 24: THE FUNCTION AND CREATION OF NEGOTIABLE INSTRUMENTS 241 6. A notation on an instrument that it is “negotiable” is sufficient to render it  negotiable. ANSWER: F PAGE: 485 TYPE: = 7. For an instrument to be negotiable, it must be in writing. ANSWER: T PAGE: 485 TYPE: = 8. The writing evidencing a negotiable instrument must be reproduced on  high-quality, letter- or legal-size paper. ANSWER: F PAGE: 485 TYPE: = 9. An instrument does not have to be signed by its maker or drawer to be  negotiable. ANSWER: F PAGE: 486 TYPE: = 10. Rubber stamp signatures can be legally binding signatures. ANSWER: T PAGE: 486 TYPE: N 11. To be negotiable, the terms of a promise or order must be included on the  face of the instrument. ANSWER: T PAGE: 486 TYPE: = 12. To be negotiable, an instrument must include an unconditional promise to  pay. ANSWER: T PAGE: 486 TYPE: = 13. An instrument that states simply “I.O.U.” is negotiable.
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242 TEST BANK 1—UNIT FIVE: NEGOTIABLE INSTRUMENTS ANSWER: F PAGE: 486 TYPE: N 14. Stating on an instrument that it is “as per contract” renders it nonnego- tiable. ANSWER: F PAGE: 487 TYPE: N 15. An instrument that promises to pay “in gold” can be negotiable. ANSWER: F PAGE: 487 TYPE: N 16. A holder is any person in possession of a negotiable instrument payable to  bearer or to an identifiable person who is the person in possession. ANSWER: T PAGE: 488 TYPE: + 17. A promissory note is negotiable even if it does not state that it is payable on  demand or at a definite time. ANSWER: F PAGE: 488 TYPE: = 18. An instrument payable to the order of a specified person is negotiable.
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This note was uploaded on 10/15/2010 for the course ACCT ACCT40 taught by Professor Birnbaum during the Fall '08 term at CUNY Brooklyn.

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Ch24-TB1-WBL-10e - Chapter24 N.B:,modified,orunchanged,as follows N =

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