Quiz 4 Study Guide

Question 1

A person in possession of an instrument

Answer 1

Bear

Question 2

(Negotiable instrument)
A writing drawn in a special form which can be transferred from person to person as a substitute for money or as an instrument of credit

Answer 2

Commercial Paper

Question 3

A written order signed by one person requiring the person to whom addressed to pay a particular sum of money, to order or to bearer, on demand or at a certain time.

Answer 3

Draft

Question 4

The person, company or financial institution ordered to pay a draft

Answer 4

Drawee

Question 5

The person who executes any draft

Answer 5

Drawer

Question 6

One in possession of commercial paper

Answer 6

Holder

Question 7

A person who becomes the holder of a negotiable instrument by endorsement which names him or her as the person to whom the instrument is negotiated

Answer 7

Endorsee

Question 8

The signature or statement of purpose by the owner on the back of a negotiable instrument, which indicates the future control of the instrument.

Answer 8

Indorsement

Question 9

Person who writes his or her name on back of an instrument

Answer 9

Endorser

Question 10

The act of transferring ownership of a negotiable instrument to another party

Answer 10

Negotiability (negotiation)

Question 11

Commercial paper made payable to the order of some named party; the word order or its equivalent must be used

Answer 11

Order paper (instrument)

Question 12

The party to whom any negotiable instrument is made payable

Answer 12

Payee

Question 13

A negotiable instrument containing a promise to pay

Answer 13

Promissory note

Question 14

The transfer of title to goods from the seller to the buyer for a consideration called the price

Answer 14

Sale

Question 15

A check drawn on a bank’s own funds and signed by a responsible bank official

Answer 15

Cashier’s check

Question 16

A check for which the bank assures that the drawer has sufficient funds to make payment

Answer 16

Certified check

Question 17

An order by a depositor on the bank to pay a sum of money to a payee

Answer 17

Check

Question 18

Having no words other than the signature of the endorser

Answer 18

Blank endorsement

Question 19

An endorsement which limits the liability of the endorser

Answer 19

Qualified endorsement

Question 20

An endorsement which prevents the use of the instrument for anything except the stated use

Answer 20

Restrictive endorsement

Question 21

An endorsement which designates the particular person to whom payment is to be made

Answer 21

Special endorsement