Allie signs a check payable to Bess, who indorses the back, gives it to County Credit Union (CCU), and receives cash. The transfer of the check from Bess to CCU is
A) an assignment.
B) a negotiation.
C) none of the choices.
D) a sale.

Question

Allie signs a check payable to Bess, who indorses the back, gives it to County Credit Union (CCU), and receives cash. The transfer of the check from Bess to CCU is​
A) ​an assignment.
B) ​a negotiation.
C) ​none of the choices.
D) ​a sale.

Quizplus · Accepted Answer

The transfer of the check from Bess to CCU through the endorsement is considered a negotiation. This is because Bess is transferring the ownership of the check to CCU, which then becomes the holder in due course and can collect payment from the drawer (Allie). An assignment would only transfer Bess's rights to CCU, and a sale would imply a transfer of ownership for consideration, which may not be the case in this situation.

Allie Signs a Check Payable to Bess, Who Indorses the Back