Question 1

Julia is buying a house from Mary.Mary wants to ensure that the bank will honor the check Julia uses to buy the house so she will probably insist that Julia pay with a:

Accepted Answer

Mary will most likely insist that Julia pays with a cashier's check because it is a guaranteed form of payment. A real check or personal check may bounce if Julia does not have sufficient funds in her account, which would cause problems for both Mary and the bank. A deposit slip is not a form of payment, and a cashier's note is not a common term for a form of payment.

Question 2

A commercial instrument where one party has a legal obligation to pay another party a certain sum of money and involves a maker and a payee only is called:

Accepted Answer

A commercial instrument involving a maker and a payee only, with a legal obligation to pay a certain sum of money, does not specifically match the definitions of a check, certificate of deposit, debit, or draft as provided in the options. Each of these instruments involves additional parties or mechanisms beyond just a maker and a payee.

Question 3

A promise to pay a certain sum of money to another party is a type of commercial paper called a(n):

Accepted Answer

A note is a type of commercial paper that contains a promise by one party (the issuer) to pay a certain sum of money to another party (the holder) at a future date or on demand. A check is a different type of commercial paper that orders a bank to pay a certain sum of money to the person named on the check. Obligation and promise are more general terms that could apply to any agreement or contract, not just commercial paper. A draft is another type of commercial paper that orders one party to pay a certain sum of money to another party, but it is typically used in international trade transactions rather than everyday business dealings.

Question 4

Under Article 3 of the UCC,a note is:

Accepted Answer

Under Article 3 of the Uniform Commercial Code (UCC), a note is actually an unconditional promise to pay rather than an order to pay. The definitions provided in the choices describe different instruments like drafts and certificates of deposit, but not a note as defined by the UCC. A note typically involves two parties: the maker (who promises to pay) and the payee (to whom the promise is made).

Question 5

The ___________ of a note is the party who promises to pay another party.

Accepted Answer

The correct term for the party who promises to pay another party in the context of a note is the "maker" or "issuer," which is not listed among the options provided.

Question 6

In Lor-Mar/Toto v.Constitution Bank,where the bank cashed bogus checks written on Lor-Mar's company account and the checks had signatures that looked like the stamped signatures Lor-Mar used,the courts held:

Accepted Answer

The answer of In Lor-Mar/Toto v.Constitution Bank,where the bank cashed...

Question 7

Cashier's checks are frequently used in transactions where:

Accepted Answer

Cashier's checks are guaranteed by the issuing bank, so they provide a more secure payment method for the seller who demands guaranteed payment. It is not necessarily related to the trustworthiness of the buyer, the price of the goods, or the familiarity between the seller and buyer. It also does not address the issue of the buyer's financial capability to make the purchase.

Question 8

A(n)______________ is a form of check in which the bank is both the drawer and the drawee.

Accepted Answer

The answer of A(n)______________ is a form of check in...

Question 9

A(n)______________ is a form of check in which the bank is both the drawer and the drawee.

Accepted Answer

A cashier's check is a type of check where the bank acts as both the drawer and the drawee, guaranteeing the funds.

Question 10

In Lor-Mar/Toto v.Constitution Bank,where the bank cashed bogus checks written on Lor-Mar's company account and the checks had signatures that looked like the stamped signatures Lor-Mar used,the courts held:

Accepted Answer

The court held that the bank was liable because the risk of loss from forged facsimile signatures had not been clearly transferred to the customer.

Question 11

A form of check in which the bank is both the drawer and the drawee is called a(n):

Accepted Answer

The answer of A form of check in which the...

Question 12

In Lor-Mar/Toto v.Constitution Bank,where the bank cashed bogus checks written on Lor-Mar's company account and the checks had signatures that looked like the stamped signatures Lor-Mar used,the courts held:

Accepted Answer

The answer of In Lor-Mar/Toto v.Constitution Bank,where the bank cashed...

Question 13

A form of check in which the bank is both the drawer and the drawee is called a(n):

Accepted Answer

A cashier's check is a type of check where the bank acts as both the drawer and the drawee, guaranteeing the funds.

Question 14

A commercial instrument where one party has a legal obligation to pay another party a certain sum of money and involves a maker and a payee only is called:

Accepted Answer

A note is a commercial instrument that involves a maker and a payee only, where the maker has a legal obligation to pay the payee a certain sum of money. A check involves a drawer, a drawee, and a payee, while a draft involves a drawer, a drawee, and a payee or endorsee. Debit refers to a reduction in an account balance, while a certificate of deposit is a time deposit issued by a bank.

Question 15

The ___________ of a note is the party who promises to pay another party.

Accepted Answer

The maker of a note is the party who promises to pay another party. The marketer is a person or company that promotes and sells products or services, the financer provides funds for a project or investment, the payer is the party who actually makes the payment, and the payee is the party who receives the payment.

Question 16

Promissory notes are instruments that involve _________ parties.

Accepted Answer

The answer of Promissory notes are instruments that involve _________...

Question 17

Under Article 3 of the UCC,a note is:

Accepted Answer

A note is a promise to pay a certain sum of money to another party. It involves two parties: the maker (who promises to pay) and the payee (who will receive the payment). The payment may be set at a future date.

Question 18

Promissory notes are instruments that involve _________ parties.

Accepted Answer

Promissory notes involve only two parties: the borrower and the lender. The borrower makes a promise to repay the loan to the lender, usually with interest.

Question 19

In Lor-Mar/Toto v.Constitution Bank,where the bank cashed bogus checks written on Lor-Mar's company account and the checks had signatures that looked like the stamped signatures Lor-Mar used,the courts held:

Accepted Answer

According to the UCC, a bank is strictly liable for making payment on forged checks, unless the bank can show that the customer was negligent in keeping the checks secure. In this case, since the checks were forged and the bank cashed them, the bank would be strictly liable for the loss suffered by Lor-Mar. The fact that the signature looked like a valid stamped signature does not absolve the bank of liability.

Question 20

A check must have _____________ as its drawee.

Accepted Answer

A check must have a bank as its drawee, which is not listed among the options provided. The drawee of a check is the entity required to pay the amount specified on the check, typically a bank or financial institution, not a court, individual, corporation, or international backer.

Quiz 12: Negotiable Instruments, credit, and Bankruptcy

Julia is buying a house from Mary.Mary wants to ensure that the bank will honor the check Julia uses to buy the house so she will probably insist that Julia pay with a:

A commercial instrument where one party has a legal obligation to pay another party a certain sum of money and involves a maker and a payee only is called:

A promise to pay a certain sum of money to another party is a type of commercial paper called a(n) :

Under Article 3 of the UCC,a note is:

The ___________ of a note is the party who promises to pay another party.

In Lor-Mar/Toto v.Constitution Bank,where the bank cashed bogus checks written on Lor-Mar's company account and the checks had signatures that looked like the stamped signatures Lor-Mar used,the courts held:

Cashier's checks are frequently used in transactions where:

A(n) ______________ is a form of check in which the bank is both the drawer and the drawee.

A(n) ______________ is a form of check in which the bank is both the drawer and the drawee.

In Lor-Mar/Toto v.Constitution Bank,where the bank cashed bogus checks written on Lor-Mar's company account and the checks had signatures that looked like the stamped signatures Lor-Mar used,the courts held:

A form of check in which the bank is both the drawer and the drawee is called a(n) :

In Lor-Mar/Toto v.Constitution Bank,where the bank cashed bogus checks written on Lor-Mar's company account and the checks had signatures that looked like the stamped signatures Lor-Mar used,the courts held:

A form of check in which the bank is both the drawer and the drawee is called a(n) :

A commercial instrument where one party has a legal obligation to pay another party a certain sum of money and involves a maker and a payee only is called:

The ___________ of a note is the party who promises to pay another party.

Promissory notes are instruments that involve _________ parties.

Under Article 3 of the UCC,a note is:

Promissory notes are instruments that involve _________ parties.

In Lor-Mar/Toto v.Constitution Bank,where the bank cashed bogus checks written on Lor-Mar's company account and the checks had signatures that looked like the stamped signatures Lor-Mar used,the courts held:

A check must have _____________ as its drawee.