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Fred Gets Paid by Check on a Friday Afternoon

Question 17

Multiple Choice

Fred gets paid by check on a Friday afternoon. As he is driving home, he sees a motorcycle for sale by Barney. Fred has no cash on him, nor does he have his checkbook, but he really wants to buy the motorcycle immediately. Therefore, Fred offers to sign the back of the check, "pay to Barney" and give it to Barney in exchange for the motorcycle. Barney is unsure if that would work or is even legal. What statement below is correct about this transaction?


A) If Fred indorsed it and gave physical possession of the check to Barney, Barney could present the check for payment.
B) Barney would not be able to cash the check as the instrument was originally written payable to Fred.
C) Barney would not be able to cash the check unless both parties wrote out a statement indicating the purpose of the transfer.
D) If the amount and the check and the fair market value of the motorcycle where close, Barney would be able to present the check for payment.

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