Deck 22: Promissory Notes and Drafts

Question 1

​ A foreign draft is one that shows on its face that it is drawn or payable outside the United States.

Answer 1

True

Question 2

Which of the following best describes a debenture?

A)It is a note secured by mortgage on real estate.
B)It is a secured bond issued by the state government.
C)It is an unsecured bond or note issued by a business firm.
D)It is a note secured by personal property.

Answer 2

C

Question 3

In the case of a time draft, the holder can require payment of the paper before it matures.

Answer 3

False

Question 4

A is a promise by a bank to repay a sum of money received by it

A)certificate of deposit
B)real estate mortgage note
C)registered bond
D)bank note

Question 5

The maker of a promissory note has accountability for: ​

A)insuring the negotiability of the instrument.
B)acknowledging the existence of every indorser.
C)insuring the underlying conditions are met.
D)expressly agreeing to pay the note according to its terms.

Question 6

​ An acknowledgment by a bank that a sum of money has been received by the bank and a promise by the bank to repay the sum of money is known as a certificate of deposit.

Question 7

A check that is presented more than six months after its date is commonly called a stale check.

Question 8

​ Coupon bonds carry detachable individual coupons to be presented for payment when due.

Question 9

Explain the duties of a bank customer regarding checks drawn on the customer's account.

Question 10

A voucher's check is a check drawn by one bank on another bank.

Question 11

A check can be issued by a post office, bank, and express company.

Question 12

​ Generally, the drawer draws a trade acceptance at the time goods are sold.

Question 13

​ A secured bond or note issued by a government is called a debenture.

Question 14

Which of the following is true of a collateral note?

A)The collateral cannot consist of stocks or bonds.
B)It is a note secured by a third person's guarantee.
C)It is a note secured by personal property.
D)The collateral cannot consist of some tangible personal property.

Question 15

What duties does a bank owe its depositor/drawer?

A)Pay every check presented to it.
B)Compare the signature on the depositor's check with the signature on file.
C)Enforce a stop payment order for up to ninety days.
D)Refuse to pay any check which would cause an overdraft on the account.

Question 16

A predated check is unlawful, but a postdated check is not.

Question 17

The drawee's signature alone on the draft is not sufficient to constitute a valid acceptance.

Question 18

A is a draft payable on presentation by the payee or holder.

A)time draft
B)coupon draft
C)trade draft
D)sight draft

Question 19

A is a written contract obligation, usually under seal, generally issued by a corporation, a municipality, or a government, that contains a promise to pay a fixed amount of money at a set or determinable future time.

A)bond
B)draft
C)check
D)coupon

Question 20

A is an ordinary check accepted by an official of the drawee bank

A)money order
B)certified check
C)cashier's check
D)traveler's check