Chap020 - Chapter 020 : Introduction to Commercial Paper...

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Chapter 020 : Introduction to Commercial Paper Chapter 020 : Introduction to Commercial Paper Student: ___________________________________________________________________________ 1. Commercially acceptable documents, such as notes, checks, and drafts, are used to transfer money from one person to another. BT: Knowledge PO: 1 True False 2. The two basic types of commercial paper are promises to pay through notes and orders to pay through checks and drafts. BT: Knowledge PO: 2 True False 3. A commercial paper includes checks in which a bank is ordered, but not drafts wherein a third party is ordered to pay. BT: Knowledge PO: 2 True False 4. The person who makes a promise is called a ‘drawer' . BT: Knowledge PO: 3 True False 5. Commercial paper may be handwritten, printed, or written by any other means that will make a mark. BT: Knowledge PO: 4 True False
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6. The promise in a note, or the order in a check or draft, must be conditional. BT: Knowledge PO: 4 True False 7. An instrument payable in a foreign currency is negotiable. BT: Knowledge PO: 4 True False 8. When the amount of a check expressed in figures does not agree with the amount stated in words, the amount expressed in words is considered the true one. BT: Knowledge PO: 5 True False 9. Checks are sometimes payable on demand. BT: Knowledge PO: 6 True False 10. A certified check is one that the bank has promised to pay when it is presented for payment. BT: Knowledge PO: 6 True False 11. A cashier's check is drawn against the depositor's own funds. BT: Knowledge PO: 6 True False 12. Most states have statutes making a person who issues a check drawn on a bank in which he or she has no account guilty of the criminal offense of larceny. BT: Knowledge PO: 6 True False
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13. Forged checks are illegal, whereas raised checks are not. BT: Knowledge PO: 6 True False 14. 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. BT: Application PO: 6 True False 15. The purpose of the Electronic Funds Transfer Act of 1979 is to govern transfers among financial institutions or among businesses. BT: Knowledge PO: 7 True False 16. 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: A. garnishee order. B. negotiable instrument. C. stop-payment order. D. restraining order. 17. Commercial paper differs from ordinary contracts because of: A. presumption of consideration and assignability. B. ability to negotiate on the commercial paper. C. the validity of the commercial paper. D. ability to negotiate on the contract. 18. A written note or letter in which one person promises to pay a certain amount of money to another at a
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This note was uploaded on 09/25/2011 for the course GENB 4350 taught by Professor Louis during the Spring '11 term at Houston Baptist.

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Chap020 - Chapter 020 : Introduction to Commercial Paper...

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