Liz,the owner of a coffee shop in Dallas,contracts with Steve,a coffee bean supplier from Chicago,for $2,000 worth of coffee beans.Liz orders her bank to pay $2,000 from her account to Steve,or someone designated by Steve.Which of the following statements is false?
A)If the check is properly sent,sending the check is less risky than sending money.
B)If someone steals the check along the way,Liz's bank may not pay anyone but Steve or someone authorized by Steve.
C)The check is an inconvenient and risky way of doing business.
D)The check is a practical substitute for cash.

Question

Quizplus · Accepted Answer

Negotiable instruments have many advantages.For example,Searle,the owner of a clothing store in New York,contracts with Amado,a swimsuit manufacturer in Los Angeles,for $10,000 worth of swimsuits.If negotiable instruments did not exist,Searle would have to send or carry $10,000 across the country,which would be both inconvenient and risky.If someone stole the money along the way,Searle would lose the $10,000 unless he could locate the thief.By using a check in which Searle orders his bank to pay $10,000 from his account to Amado,or to someone designated by Amado,Searle makes the payment in a far more convenient manner.He sends only a single piece of paper to Amado.If the check is properly prepared and sent,sending the check is less risky than sending money.Even if someone steals the check along the way,Searle's bank may not pay it to anyone but Amado or someone authorized by Amado.And,because the check gives Amado the right either to collect the $10,000 or to transfer the right to collect it to someone else,the check is a practical substitute for cash to Amado as well as to Searle.

Liz,the Owner of a Coffee Shop in Dallas,contracts with Steve,a